How would you get terminal value for a project?
Let's say you are trying to find the NPV of a project. Do projects typically have a terminal value? Would you use terminal growth rate or exit multiple?
Let's say you are trying to find the NPV of a project. Do projects typically have a terminal value? Would you use terminal growth rate or exit multiple?
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Would need more info on the project. If the project is growing then it would make sense to model it as such, but if it is more stable asset (maybe Capex) that is not going to have significant growth a multiple might be better. I am not certain, but off the top of my head this seems to make sense.
I thought a bit about this, and it doesn't make much sense to say that a project will continue to grow infinitely right? Think multiple might be better (salvage value), or trying to project out until the end of the useful life of the project.
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