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DCFs are exceedingly difficult to get right in practice, because they involve predicting future cash flows (and the value of them, as determined by the
DCFs are exceedingly difficult to get right in practice, because they involve predicting future cash flows (and the value of them, as determined by the discount rate), and all such predictions require assumptions. The farther into the future we predict, the more difficult these projections become. Any number of assumptions made in a DCF valuation can swing the value of the companysometimes quite significantly. Discuss this statement, and provide proper justifications based on your knowledge of DCF.
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