e3value user manual, first release

Chapter 7
Discounted Net Value Flow Analysis of a Time Series

This chapter describes the quantification capabilities of the e3value tool. This has not yet been implemented in the e3web tool.

New business ideas require investment and usually lead to a negative net cash flow initially. To analyze the financial sustainability of the idea, we need to do a net cash flow analysis of a sequence of market scenarios, which we call a time series. There are several methods to compute return on investment, including calculation of the payback period of investments, internal investment rate calculation, real option theory, and Discounted Net Present Cash Flow (DNPC) technique [3]. In this chapter we show how to do a discounted net value flow computation of a time series.

 7.1 Time series
 7.2 Naive net present cash flow analysis
 7.3 Discounted net present cash flow analysis
 7.4 The cost of risk
 7.5 Discounted net present cash flow computation in the time series tool