Question: It is impossible to use DCF methods for evaluating investments
“It is impossible to use DCF methods for evaluating investments in R&D. There are no cost savings to measure, and we don’t even know what products might come out of our R&D activities.” This is a quote from an R&D manager who was asked to justify investment in a major research project based on its expected NPV. Do you agree with her statement? Explain.
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