Piers Hemy wrote:
>Sounds like you have project analysis using DCF pretty well understood!
>
>How to choose the right evaluation criterion to enable approval of the
>decision already made.
>
>
If I had a dollar for every DCF I ever did.... Hey, wait a minute, I do!
I may even get as many $ a year in retirement as the number of analyses
I did. Or not....
What you say has more than a little truth in it in my experience. And
the tool is inherently flawed, no matter how honestly applied, but the
only one at hand. All these analyses depend on all kinds of assumptions
about the future, none of which will be particularly accurate.
I still think the exercise is often actually useful. If honestly done,
it both makes the assumptions explicit and provides a framework in which
to evaluate them. Just the process of doing an analysis forces more
thaought than would otherwise go into the decision.
Moose
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