Question
When you are considering to start a business, the most important consideration is whether the venture will result in value creation, which can be determined
When you are considering to start a business, the most important consideration is whether the venture will result in value creation, which can be determined by estimating the of the venture. That is, you must compare the initial investment with the expected discounted cashflow over the life of the business. For example, if you are considering to open a cafe in Beppu, which would require an initial investment of 5,000,000 yen, you will need to earn an annual cashflow of at least yen (in units and no 1000 separators) if you believe that the appropriate discount rate is 20%, and assume that there is no opportunity for growth.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started