From the course: Excel: Financial Functions in Depth
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Using NPV to calculate a discounted cash flow (DCF) - Microsoft Excel Tutorial
From the course: Excel: Financial Functions in Depth
Using NPV to calculate a discounted cash flow (DCF)
- [Instructor] Discounted cash flow, or DCF, is one of the most commonly used methods for finding the value of a company or another cash flowing asset. So sometimes we use a DCF method when we're trying to decide the value of an asset. For example, you might be considering purchasing a company or a large piece of equipment and want to know what the value of that asset is for you. Most of the time though, we use it to value a company, and that's what we are going to do in our example today. In order to use the DCF method to arrive at a value for the asset or the company, you need the following three pieces of information. You need to know the free cash flow to the firm or the information necessary to calculate this. You need the weighted average cost of capital. So we know how to calculate this because we did it in the previous movie. And you'll also need to make an assumption about the perpetuity growth rate. So we usually…
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EOMONTH, EDATE, and timing flags4m 50s
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Calculate pro data rental costs with date functions4m 9s
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IF: Building logical comparisons5m 21s
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Calculating the payback period4m 27s
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Using RATE or RRI for compound annual growth rate (CAGR)4m 46s
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Creating a debt schedule4m 50s
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Using SLN and IF to calculate depreciation3m 10s
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Creating a depreciation schedule3m 51s
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Using dynamic arrays to create a depreciation waterfall6m 15s
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Calculating weighted average cost of capital (WACC)6m 21s
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Using NPV to calculate a discounted cash flow (DCF)4m 34s
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