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You focused on internal rates of return and netpresentvalue. I’m glad they taught you internal rates of return and netpresentvalue in business school. They are assumptions cascading on assumptions, presented as if they were statistical truth. I’m not alone in this.
Is your KPI netpresentvalue of the project? You could include time-series forecasting, predictive analysis , etc. Your objective, in this case, is to determine whether your $1 million should be invested in the plot. The next step is to determine your KPI. What you choose is critical—everything ties back to this step.
Internal rates of return and netpresentvalue. ” I hate hearing about a $43 billion market, and even more so when you present a sales forecast validated by getting some percentage of that market. Not just disruptive , but market-leading , and viral , and pivot. Not discounted cash flow. .
1-800 Flowers, meanwhile is valued at 0.6x revenues because growth is much lower – forecast at 5-7% next year, and their EBITDA margin is 8%. They reported 168% YoY revenue growth in the Q3 earnings report and their EBITDA margin is 19%.
I don’t think that a NetPresentValue calculation is appropriate for every company. In the long run, most asset classes correlate with the rate of GDP growth, and most forecasters expect the economy to grow at anemic rates for the next decade.
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