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Biotech / Medical : VD's Model Portfolio & Discussion Thread
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To: Andrew H who wrote (1424)6/25/1997 4:02:00 PM
From: Pseudo Biologist   of 9719
 
Andrew, from one of the links I posted just now: "The discounted cash flow analysis takes into account the timing and of size of anticipated income and expenditures and can be easily adjusted for inflation and deflation however, the technique does not adequately adjust for risk. The discount rate which reflects the time value of money has been
adjusted by some investors or appraisers to consider risk by increasing or decreasing the discount rate. Any significant adjustment in the discount rate to adjust for risk will impact the discount
process and distort the value estimate. "

Also, that site divides by (1+discount_factor) while I was multiplying by (1 - discount_factor); in general 1/(1+X) is different from (1-X). I think I saw the 1/(1+X) formula in a couple of places, so probably that is the correct one.

And, yes, I'd say this is just a tool. And yes, lunch is over.

PB (not PCPA)
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