Is The NPV Method Also Valid For Your Home Business?
When you want to stop your Home Business the worst thing to do is to stop suddenly or slowly with the thing that has made your Home Business so successful. Why? Think of all the hard work that you have put into building your business into a success. It is probably still going strong and generating a lot of income for you. Why not try and sell your business because it is obvious that it has some sort of value?
Before selling anything you need to assess your company and calculate the possible value of your Home Business. In that way you are able to defend and justify the price you are asking. Important to note is that value is subjective and not the same as price. The question is how to value a company. There are several methods to value, but one of the better methods is the net present value of future cash flows, abbreviated as NPV 1).
The NPV takes into consideration three variables. First of all, value is being calculated with the forecasted cash flows (and not profits). You need to think very carefully how much cash your Home Business will generate in the next years. These assumptions are based as well...
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