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Advantages of Discounted Cash Flow Methods of Capital Investment

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What are the advantages of using discounted cash flow methods of capital investment evaluation?

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The solution does a great job of explaining the answer regarding the advantages of discounted cash flow methods of capital investment. The solution is very well written and easy to follow along and clearly explains the process in a simple way. Overall, a great response to the question being asked.

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There are several advantages of DCF:

1. The best reason to like DCF is that it produces the closest thing to an intrinsic value. The alternatives to DCF are relative valuation measures, which use multiples to compare projects. While relative valuation metrics are fairly simple to calculate, they ...

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