Friendly Finances & Loans

Discounted cash flow is based on one key principle: that the value of money changes, effectively reducing with time. In other words, cash today is worth more than cash promised in the future. For example, it is not worth investing $100,000 today for the promise of the same amount returned next year; more usefully, discounted [...]

Harley-Davidson, a motorcycle manufacturer, hit hard times during the late 1970s that resulted in a management buy-out in 1981. At this point, senior managers visited Honda’s Marysville, Ohio, motorcycle facility. The contrast with their own facility was dramatic in terms of layout, production flow, efficiency and inventory management. Harley’s managers concluded that if they were [...]