Discounted cash flow valuation involves estimating future cash flows and comparing their discounted values with investment outlays required today.

Question

Quizplus · Accepted Answer

Discounted cash flow (DCF) valuation calculates the present value of an investment based on its expected future cash flows, adjusting for the time value of money by discounting those future cash flows to their present value and comparing this with the current investment cost.

Discounted Cash Flow Valuation Involves Estimating Future Cash Flows and Comparing