Discounted cash flow measures the cash inflows and outflows of a project as if they occurred at a single point in time in order to facilitate a proper comparison.

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Discounted cash flow (DCF) is a valuation method used to estimate the value of an investment, project, or company. DCF measures the cash inflows and outflows of a project as if they occurred at a single point in time in order to facilitate a proper comparison. This is done by discounting the future cash flows back to the present day using a discount rate. The discount rate is typically the weighted average cost of capital (WACC) for the project or company.

Discounted Cash Flow Measures the Cash Inflows and Outflows of a Project