Discounting cash flow
Discussion
noel said:
I'd go for 7%, it's a more realistic figure in my opinion. Also your lecturer will think you've done a bit more research, multiples of 5 are considered too easy (no offence to the previous poster).
Agreed.
One of the most ironic factors in learning and running a business is that the people who will ultimately govern your future will have never run a business themselves.
Very rare exceptions excluded, people who are educated in a 'Business' related qualification who either mark or lecture business, or indeed work in a bank and pick holes in your business plan have had no real world experience in business.
After all, if they were that great at it I am sure they could find many other more profitable uses for their skills!
My experience with learning business is dont try to play them at their own game, and indeed a figure of 7%, 8% for example does sound like that it is chosen for a reason rather than a coincidentally correct guess.
An example of my grind is that for my Marketing section of my degree I was given 17% in the second year exam. I couldnt believe it, and went to see the head to find the marking scheme. I found that 50% of the marks were given out for reciting the definition verbatim of the business terminology involved in the question.
Despite my protests that I was actually trying to answer the particular question in detail rather than just recite things GCSE style, he told me the marking scheme was fixed.
In the retake I got 40 odd percent, a pass mark into the third year which was what I needed without even attempting to answer a single one of the questions, just recalling 8 or ten definitions of 'market segmentation' and the like...
I realised after I left and got some real world experince that the qualification was a means to an end only!
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