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Subject:  Re: Discounted Cash Flow Model - Negative FCF Date:  4/26/2011  12:34 PM
Author:  jackcrow Number:  1648 of 1675


A couple ways to double check inputs are to use Dr. D's industry averages. For example, he has a spreadsheet that will help derive CapEx using inputs but it also has industry averages. One of the reasons I stopped using modified versions of his spreadsheets is because some of the inputs seemed unnecessarily complicated. Too many moving parts for this mark with chalk cut with axe knucklehead. It is important to know why he has them in the spreadsheets so you can make an intelligent substitution or elimination.

One way to test your model is to play with a few inputs until your output matches current prices. This reverse engineering of market price can give you insight into the market. With both sets of inputs in hand you can make a rational decision about which output is more mostly right than the other.

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