https://launchscore.com/ Accuracy of our Estimates To help us gauge the accuracy of LaunchScore’s estimates, we recently surveyed 68 current business owners and asked them to compare the PYE to their own businesses’ net profit by searching for their business type and city on LaunchScore.com. 72% of these business owners found the PYE number to be accurate.

Most of the remaining respondents reported that the PYE was somewhat lower than their current profits. This suggests that the PYE is a lower bound on profitability, and that with good strategy and execution, entrepreneurs can better it! We hope entrepreneurs will use the PYE to gauge if an opportunity meets their aspirations, and to help them determine their entry and expansion choices. Net Present Value (NPV) Net Present Value (NPV) emanates from the concept of Time Value of Money which is founded on the idea that money available today is more valuable than the same amount of money at a future time because it can start earning interest immediately. In this realm, when computing how much is worth in today’s dollars all cash flows (CFs) to be received (or spent) at a future date one has to compute the so-called “discounted cash flows” (DCFs), i.e. the present value of each expected cash inflow (positive) and outflow (negative). The computation of the DCFs takes into account not only the number of time periods into the future (e.g. years) but also an interest rate to proxy the investor’s opportunity cost (e.g. market interest rate or hurdle rate). Then, NPV is merely equal to the summation of all DCFs. Contact Details:

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