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If you wished to value a corporate project for a firm, what method described below would likely give a decent ( if not perfectly accurate
If you wished to value a corporate project for a firm, what method described below would likely give a decent if not perfectly accurate result
A Add benefits and deduct costs, discounting each by a rate determined from a model. If the sum is positive, invest, otherwise do not invest.
B Add benefits and deduct costs. Multiply the sum by the discount rate. If the total is greater than invest, otherwise do not invest.
C Add benefits, divide by total costs. Subtract this figure from the discount rate. If the total is greater than invest, otherwise do not invest.
D Add benefits, divide by total costs. Subtract this figure from the discount rate. If the total is less than invest, otherwise do not invest.
E As investment is inherently risky and certain, there is unfortunately no method to estimate the value of a firm project.
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