BU121 Study Guide - Final Guide: Bargaining Unit, Job Analysis, Agency Shop
Document Summary
In order to value an asset an income stream, growth rate and discount rate (usually from experience) are needed. Considerations in applying the income approach: because the development of projections depends on specific outcomes and milestones, one scenario of cash flow is inadequate, the risk of failure is likely higher than the present value discount rate. If losses are forecasted in the first few years, it is likely that they will occur and even greater ones. Intellectual property (patents, copyright: protects products, time to market. If it is rough or smooth, can the investors help with hurdles, when will they breakeven. Diversification growth strategies: diversification acquire/ merge with a company that is unrelated to your business (ex: general electric merged with a bunch or companies unrelated with what they do. Service vs. manufacturing: similarity: both convert raw material/ inputs into finished goods, differences: Person with unsatisfied need or possession that requires care. Quality of work as well as the service.
