A Monte Carlo Comparison between the Free Cash Flow and Discounted Cash Flow Approaches

One of the debates in the capital budgeting model selection is between the free cash flow and DCF methods. In this paper an attempt is made to compare SVA against NPV model based on Monte Carlo simulations. Accordingly, NPV is found less sensitive to value driver variations and has got higher forecast errors as compared to SVA model

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Year of publication:	[2002]
Authors:	Mekonnen Akalu, Mehari
Other Persons:	Turner, John Rodney (contributor)
Publisher:	[2002]: [S.l.] : SSRN

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Extent:	1 Online-Ressource (17 p)
Type of publication:	Book / Working Paper
Notes:	Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments August 9, 2002 erstellt
Other identifiers:	10.2139/ssrn.324842 [DOI]
Classification:	G30 - Corporate Finance and Governance. General ; G31 - Capital Budgeting; Investment Policy ; L6 - Industry Studies: Manufacturing ; L8 - Industry Studies: Services ; L9 - Industry Studies: Transportation and Utilities ; M10 - Business Administration. General ; O22 - Project Analysis ; O32 - Management of Technological Innovation and R&D
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10012740886