jleduc

Detailed project valuations are often requested by executives, the basis being they will feel more confident in their decision making process if the accuracy of the forecasts is increased They might believe that adding detail to their valuations can accomplish this; however, this is inevitably not the case (All the NPVs are wrong, can we talk about the portfolio now?).  Excessive levels of detail often lead to poorer valuations because analysts spend less time on each input and are loathe to revisiting them when assumptions change.

Our most successful clients are the ones who keep things simple and manage to spend most of their time generating analysis and insights rather than inputting data. Almost all of them, however, begin with overly complicated models before scaling back to an optimal level of detail.
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