First, we must appreciate that there is a difference between depreciation and amortization cash flows as computed in the IRS code/tax books or those reported in the financial accounting/reporting books. Now we can discuss, which of these must be factored into our DCF valuation model.

If you had access to depreciation and amortization cash flows as computed in the IRS code/tax books or those reported in the financial accounting/reporting books choice, which one would you prefer to use?

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