To Use the Discounted Cash Flow Method, the Future Cash

question 7

Multiple Choice

To use the Discounted Cash Flow method, the future cash flows have to be forecasted. To determine these estimates management will :

• A)Make justified assumptions about income, expenses, profit and all other significant figures
• B)Use a benchmarking approach to align the firm's cash flows with its rivals' cash flows
• C)Use accounting data and directly extrapolate from the past the future cash flows
• D)Reach consensus by discussion with a group of external experts such as stockbrokers

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