How to treat initial investment in DCF calculation made let's say 2 years after initial investment? and will it be different if initial investment also involve loan?

Question

anonymous · Answer

Can you re-phase your question? i dont see how an initial investment can be made 2 years after an initial investment.

anonymous · Answer

If the pre-operative investment is what you mean, it should be forecast in the DCF model, but if the investment was done in the past, is a dead cost, you don't need to take it into account. For example an operative asset is valued trough the cash flow it generates in the company (its value is in your DCF, adding also its cost as the investment done in past years, you are going to overvalue the asset).
But if that investment was done with some kind of debt, then you should carry that obligation in your forecast.
If it is a non operative asset some people add its commercial value to the company value.