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Valuing a Business Based on Potential Cash Flow and Unique Selling Points
Valuing a business requires considering the potential cash flow it can generate after tax, which determines the return on investment for an investor. If a business is valued at $1 million and an investor wants to buy 10% of it for $100,000, the company should generate $100,000 in after tax cash flow. If the business can potentially be acquired due to unique technology or other factors, the valuation might not solely depend on cash flow but also on the business's attractiveness to potential acquirers.