Answered: “The trouble with discounted cash flow…

Business

Accounting

“The trouble with discounted cash flow methods is that they ignore depreciation.” Do you agree? Explain.

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter1: Multinational Financial Management: An Overview

Section: Chapter Questions

Problem 2ST

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Question

“The trouble with discounted cash flow methods is that they ignore depreciation.” Do you agree? Explain.

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

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