DCF Simple but has Weaknesses!

• A-Z
• FAQ
• Start page
• Wisdom
• Zoom
• More

  App Reviews
• 
• Log in

• Change & Organization
• Communication & Skills
• Decision-making & Valuation
• Ethics & Responsibility
• Finance & Investing
• HRM
• Knowledge & Intangibles
• Leadership
• Marketing & Sales
• Program & Project
• Strategy & Innovation
• Supply Chain & Quality

Discounted Cash Flow Knowledge Center

Forum 1 sudam charan behera Manager, India DCF Simple but has Weaknesses! The DCF method is the simplest in use, but is a complete failure in measuring uncertainty and risk, so simulation and the real options method hold the key for those situations... X Welcome to the Discounted Cash Flow forum. The topic being discussed here is: "DCF Simple but has Weaknesses!". Sign up now to gain access. It's easy and 100% free. Log in   Comments Sort by date Sort by rating Rating   0 Nick Moore Financial Consultant, United Kingdom   DCF is Simple and Practical. Real Options are Too Complex It is true that DCF on its own does not adequately show risk. But there are a number of methods that can be utilised in a DCF calculation to show risk: 1. Use an appropriate discount rate for the risk. 2. Use sensitivities. 3. Use Monte Carlo Analysis, although this is starting to get almost as complex as the valuation of real options, so is not practical for most business use. At the end of the day, the DCF analysis gives one data point, and judgement should always be used, combined with other metrics (such as IRR) to determine if a project is good or bad.   0 ANDREAS MAVROGENIS, Cyprus   Another DCF Disadvantage DCF analysis has another disadvantage: it is inaccurate in the long term, because of changes in the ... Sign up   Leave a comment Share your knowledge or experience

More on Discounted Cash Flow: Summary Discussion Topics DCF vs Present Value DCF Method versus CAPM Model 🔥 What is Discounted Cash Flow? (DCF) Advising Finance and Small Business 👀 DCF Simple but has Weaknesses! DCF for Capital Projects in Condo Association Special Interest Group Do you know a lot about Discounted Cash Flow? Become our SIG Leader

Discounted Cash Flow Knowledge Center

About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
© 2023 12manage - The Executive Fast Track. V16.1 - Last updated: 31-5-2023. All names ™ of their owners.