A 5-year discounted cash flow project analysis for building


1. A 5-year discounted cash flow project analysis for building a smoothie factory should take into account which of the following:

a. Cost of driveway repair leading to and from the factory

b. A planned sell-off of the factory to a competitor

c. The cost of blueberry supply each year for making blueberry ice cream

d. Supply smoothies are expected to increase demand for smoothie cones we already produce

e. According to our CFO, year 4 features a high opportunity cost where we could have made glue

Why?

2. P/E:

a. Is more important for valuing companies in distress than healthy companies.

b. Is better than P/B when earnings are volatile.

c. Should not be used for defensive stocks because of inelastic demand.

d. Is calculated by Price-per-share divided by EPS.

e. Could be used in the Profile Strategy.

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Financial Management: A 5-year discounted cash flow project analysis for building
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