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3.4) Which statements regarding valuation are correct? A Project investments with limited lifetime require a perpetuity value to be added. B Analysts should forecast cash-flows
3.4) Which statements regarding valuation are correct?
A Project investments with limited lifetime require a perpetuity value to be added.
B Analysts should forecast cash-flows for as many periods as possible.
C The growth rate of the perpetuity must be lower than the discount rate (opportunity cost of capital)
D NPV calculation is subject to many assumptions which is why scenario analysis and stochastic modelling is a much better way of valuation.
E Multiples valuation is better than NPV valuation when you evaluate a unique company.
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