I´ve told you about Crystal Ball capabilities and how you could forecast dependent variables when you are determining the Net Present Value of the Discounted Cash Flows.
I´ve considered an exercise in an ideal world without taxes and none complexities to simplify the comprehension of the capacities of Crystal Ball.
In this simple exercise considering Forecasts for the Net Present Value I´ve assigned distributions of probabilties for the following variables :
- Gross Margin
- Discount rate
Of course you will never have certainty about the final values for the forecasted variables but at least you will have a wide scope and a probabilistic distribution, in this case of the Net Present Value of the Discounted Cash Flows.
