O'Reilly logo

A Pragmatic Look at Valuation (Collection) by Carolyn L. Evans, George Chacko

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

4. Free Cash Flows

4.1 Introduction

As stated in Chapter 1, “Introduction,” the main goal of this book is to figure out a detailed methodology for measuring the value of any business decision, project, or asset. What this essentially means is that we need to be able to evaluate the following present value relation for any business decision, project, or asset:

Image

where E(CF1), E(CF2), and so on are expected future cash flows, r denotes a discount rate, and Value0 is the value today (time 0) of the project that we are trying to measure. Because all the cash flows and discount rates are expectations of future events, in the previous chapter we started ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required