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Journal: Science and world (Vol.2, No. 33)

Publication Date:

Authors : ;

Page : 104-111

Keywords : mathematical model; model of discounted cash flow (DCF model); analytical models for cash flow; matrix model of cash flow (MCF model); yearly rate of return; periodic rate of return; return on investment; capitalization of interests; shift in capital;

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Cash flow model (i.e. the interconnection between cash flows and conditioning factors), presented in the matrix notation suggested by the author, is demonstrative (imaginative), interpretable and solid, unlike the other notations. The matrix model of cash flow (MCF model), suggested by the author, offers an alternative (and more informative) way for assessing cash flow current value to the DCF model. MCF model also allows solving the task of determining cash flow current value in the cases when DCF method does not work, which are the situations when the interconnection between yearly rates of return and periodic rates (for instance, day or monthly rates) for the corresponding cash flows is unobvious, i.e. there is no analytical (functional) dependency. In this cases cash flow current value is a result of solving optimization problem, noted in smart matrix notation. The article is for practicing appraisers, teachers, students and theoreticians in value appraisal.

Last modified: 2016-08-18 18:31:29