Abstract: Cash is king and discounted cash flow (DCF) analysis is the appropriate way to value projects and corporations. There is a clear connection between decisions that managers make and the value of their company. Both corporate and fund managers can use the same tools to estimate the intrinsic value of their decisions. The fundamental measure of value creation is net present value (NPV). The golden rule of finance is to pursue strategies and projects with a positive NPV. This objective necessarily includes a comprehensive examination of all the costs and profits associated with the project, those that occur today as well as those that may occur many years into the future, such as cleanup costs and the probability of stranded assets. The NPV decision rule helps maximize the value of the firm by aligning management's goals with strategies best suited for commercial and long-term financial success.
Publication Year: 2017
Publication Date: 2017-12-08
Language: en
Type: other
Indexed In: ['crossref']
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