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income approach

Jhon Fredy Ortiz

Created on April 7, 2024

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Transcript

JHON FREDY PORTIZ RUBIO group: (212032_74) date: 07/04/2024

income approach

This method uses financial analysis to determine the value of a company, delving into the future earnings that are projected by the company and the cash flows of the company.

The formula for calculating the present value of the workforce is as follows: [ VP = \frac{CF_1}{(1 + r)} + \frac{CF_2}{(1 + r)^2} + \ldots + \frac{CF_n}{(1 + r)^n} ] where: (VP)is the present value of cash flows (CF_1, CF_2, \ldots, CF_n) are the projected cash flows for each year. (r) It is the appropriate discount rate calculated as the risk-free rate plus the risk premium.

How can companies create value from innovations? A company can create value through innovations in a variety of ways such as open, disruptive, and business process innovation. Innovation is the great way to create value in the company since it helps effectiveness and reduces costs, in addition to giving new products that only they have to their customers, generating high standards in competitiveness.