Explain terminal value calculation at end of forecast period, Financial Management

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Explain the terminal value calculation at the end of the forecast period. Why is it necessary?

The organization whose business operation is being valued is not supposed to suddenly cease operating at the end of the discrete forecasting period, although to continue operating indefinitely into the future since a going concern. The terminal value calculation calculates the values of the cash flows that take place in the year subsequent the discrete forecasting period and beyond.

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