Discussion: Discounted Cash Flow
In?finance, discounted cash flow?(DCF) analysis is a common technique of placing value on a project or company. All of the future?cash flows are projected and?discounted?by using cost of capital to determine their?present values?(PVs). Adding up all future cash flows, both incoming and outgoing, provides the?net present value?(NPV).
Respond to the following in a minimum of 475 words:
• Give an example of a situation where a building contractor may want to use the discounted cash flow?(DCF) analysis method.
• Discuss a situation where a method to determine a project's valuation, other than discounted cash flow?(DCF) analysis, would be favorable.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.