Compose a 250 words essay on Investment appraisal under uncertainty. Needs to be plagiarism free!Secondly, reluctance to invest is justifiable because it compels the user to keep in mind the Intrinsic

Compose a 250 words essay on Investment appraisal under uncertainty. Needs to be plagiarism free!

Secondly, reluctance to invest is justifiable because it compels the user to keep in mind the Intrinsic Value of the investment. Intrinsic value is merely a numbers introduced into this model. It is possible for one to assume unrealistic terminal value based on overstated or understated growth rates. According to Nitzan and Bichler (2009), this generates unrealistic intrinsic value outcomes.

The third reason for reluctance is the Limitations of Discounting Cash Flow Model in relation to the payback period. It can only function for a limited number of years, suitably, 5-year time payback period. Again, it cannot function if the growth rate is higher than the discounting rate (Nitzan & Bichler,