Personal Finance

Discounted Cash Flow

Imagine you are a professional, savvy investor who comes across many investment deals on a regular basis and have to make choices as to which ones to pursue. It's a fresh start to the week, you're feeling really bullish, and ready to invest some money, and you receive details about 2 investment deals; Project A and Project B. Both projects have the same initial investment $3m, and last for the same amount of time, 5 years. The only difference is the cash flows; in Project A you are expected to receive $2m in year 1, $4m in year 2, $4m in year 3, $2m in year 4, and finally nothing in year 5. In Project B, you are only expected to receive a lump sum $14m in year 5. Which one do you pick? Take a look at Figure 1

Written by

Anshil Bhansali, Jun 21, 2020

Personal Finance

Treat your life as running a Business

These are my tips on being financially independent.

Written by

Anshil Bhansali, Jun 11, 2020