Thursday, December 8, 2011

Discounted cash flow techniques answer which of the following questions?

A. How much average profit is generated per dollar of average investment?


B. Do the cash returns of the investment exceed the cash outlays?


C. How long will it take to recover the original investment outlay?


D. How does the present value of future benefits from the investment compare to the investment outlay?|||The answer is D - you compute the future returns, take the value of those returns in todays dollars and compare it to the book value of the investment.

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