TRADITIONAL V/S DCF METHODS
Traditional method
- The traditional method are also referred to as unsophisticated or non discounted cash flow method
- These method is known as non DCF because they do not take time factor into consideration
- These are the various Non DCF methods –
- Pay back period
- Accounting rate of return
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DCF method
- The discounted cash flow method are also known as sophisticated or time adjusted methods
- This are known as DCF method because it take time factor into account
- The following are the various DCF methods –
- Net present value
- Internal rate of return
- Profitability index
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