Hello!
Can anyone please shed a light on why the investment of $1m for the new technology given on Table 4 isn't included in the costs when doing business valuation with the technology? In fact, it isn't included in any calculation at all. Is there a guideline for when investment costs should or shouldn't be included?
Thank you!
Hey !!
This is a super easy question with a structure.
Do not include it for : business valuation with Discounted Cash Flow.
Include it for : any Net Profit Value calculation.
BASIC STRUCTURE
Formula Business Valuation
Formula Net Profit Value
EXPLANATION
An Expect Annual Cash Flow is a cash flow you are going to get every year. The investment cost is a one-time investment so we are not considering it.
If it is helpful, upvote it ;)
Mounir F.
Case von