this post was submitted on 26 Jul 2024
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Financial Modelling

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DCF questions (relaxed assumptions) (self.financialmodelling)
submitted 4 months ago* (last edited 4 months ago) by Pat12 to c/financialmodelling
 

2 questions i'd like to understand about DCF models which I am learning:

  1. I understand the difference between growth capex and maintenance capex, but what if I want to only put in maintenance every 5 or 10 years? is there a formula that I can use to say incorporate maintenance capex every 5 years?

  2. we assume that assets are ready to use right away but what if they are not? For example, what if I have an asset but some of them are not ready to use, like a forest but some trees are not ready to be cut down or cows and some are not ready to produce milk. My starting revenue would increase every year, presumably by some given growth rate, but my starting capacity would change, so how do I incorporate both?

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