Terminal Cash Flow Discounting

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Another important concept is that of the Terminal Value in cash flows. In most projects once you have modelled say 10 years, you want to stop. You don’t want to model forever. But in real life the project won’t just stop at that point.

You may be able to sell it in its entirety, or sell the assets or perhaps you have a cost you have to pay to close the project (think environmental costs on a mine).

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