Week4 – qm | Business & Finance homework help
Given our information – we can assume that Plan A requires an initial investment but promises future returns that are greater than Plan B, while Plan B does not require an upfront cost but delivers lower returns over a longer period. We must also factor in the estimated long-term EBIT ($302,000 annually) as well as an appropriate discount rate. By plugging these figures into an online DCF calculator – we can calculate that Plan A would provide a higher EPS than Plan B.
Ultimately – understanding how to use DCF analysis when evaluating investments is essential! By incorporating such techniques into their decision-making process – businesses are able to make informed decisions based on reliable metrics.