A final-year student at a business school estimated the net present value (NPV) of his proposed business plan — a tourism and transport company in India — using three different procedures and ran into different valuation results. He desired to know the reasons for the difference and approached the professor who had taught him valuation concepts in a finance class.
Learning Objective: This case was created for an MBA-level course in corporate finance. It truly is meant to provide students with a background to create the following statements and evaluation:
Approximation of cash flow using Capital Cash Flow, Free Cash Flow to Equity, and Free Cash Flow to Business.
Valuation of a project.
Mismatch of valuation estimates.
The case provides an opportunity to compare and review some of the cash flow valuation techniques that are popular.
Publication Date: 09/12/2011
This is just an excerpt. This case is about Finance
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