In finance, discounted cash flow (DCF) analysis is a widely used technique for valuing a project or company. All future cash flows are estimated and discounted using cost of capital to determine their present value (PVs). Adding all future cash flows, both incoming and outgoing, provides the net present value (NPV).

Answer the following with at least 175 words :

• Give an example of a situation where a construction contractor might want to use the discounted cash flow (DCF) method of analysis.
• Discuss a situation where a method other than discounted cash flow (DCF) analysis would be appropriate to determine the valuation of a project.