In constructing a DCF, a company has $100 million in NOLs that expire in 10 years. Projected pretax income starts at $10 million and grows by 10% annually. Which is the best way to model the NOLs?

1. AIgnore NOLs because they are non-cash
2. BDeduct NOLs from enterprise value at the end
3. COffset taxable income each year until the NOLs are used or expire✓ Correct answer
4. DDeduct the full NOL balance from year one taxes

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