Mid-Year Convention in DCF

This problem tests whether you understand how a DCF reflects the timing of cash flows, not just their size. In a valuation interview, you are expected to explain why assuming all cash flows arrive at year end can distort the economics of a business, and how the mid-year convention better approximates cash being generated throughout the year. Interviewers ask this because it checks both conceptual judgment and technical fluency in discounting, timing conventions, and the effect of cash flow timing on present value in intrinsic valuation.