Week 13 Reading Reflection

What was the biggest surprise for you in the reading? In other words, what did you read that stood out the most as different from your expectations?

The biggest surprise to me in the reading was the section about discounted earnings method. I really didn’t have large expectations for this except for how discounts may at times differentiate the estimated amount of cash flow. In the reading however, there is a large section about a price formula that companies use in order to find out the proper amount to adjust a product to for discounts. Furthermore, I had never realized how much thought went in to making discounts. Questions have to be asked in regards to a firm’s value and reasonable life expectancy of the business.  

2) Identify at least one part of the reading that was confusing to you.

A section of the reading that was confusing to me was the area talking about how to complete due diligence. The definition is stated but the wording is still rather confusing. The examples used in the book did not really clear things up for me. The table used to explain only poses more questions and vague phrases that do not clarify things.

3) If you were able to ask two questions to the author, what would you ask? Why?

Question one: Which of the two methods for venture valuation is more accurate?
Question two: How do the replacement value methods work?

4) Was there anything you think the author was wrong about? Where do you disagree with what she or he said? How?

I cannot say the author was wrong, but I can slightly disagree with what they said about emotional bias. They spoke about reasons for acquisition. One main point they made was about goals of the buyer and seller. These goals are up to the individual, and therefore cannot be fully described as accurate within the book.