Valuation Activity

Your team will develop methods for valuing two different assets. One asset is a cash flow producing asset and should be valued based by using a discounted cash flow method. The other asset should be an asset, which does not produce cash flows.

Steps:

1. Review the PowerPoint presentation entitled: What is it Worth?

2. Select two assets to value.

a. The first asset should be an asset that produces cash flows.

b. The second asset should be an asset that does not produce cash flows.

3. As a team discuss possible strategies that you can use to value the two types of assets.

4. Conduct research to obtain information that will help you in the valuation process.

5. If there is information that is not available, but which is necessary for your valuation, you can make estimates, which you believe are reasonable, in order to implement the valuation method selected by your team. (Clearly state the sources of your information. If your team uses estimated data, state which data is estimated.)

6. Implement your selected valuation methods for each asset and determine a value.

7. Prepare a PowerPoint presentation, which you can present to the class to explain your valuation methods and the results you obtained.