discounted cash flow
- /ˌdɪskaυntɪd 'kæʃ fləυ/ nounthe calculation of the forecast return on capital investment by discounting future cash flows from the investment, usually at a rate equivalent to the company’s minimum required rate of return.Abbreviation DCFCOMMENT: Discounting is necessary because it is generally accepted that money held today is worth more than money to be received in the future. The effect of discounting is to reduce future income or expenses to their ‘present value’. Once discounted, future cash flows can be compared directly with the initial cost of a capital investment which is already stated in present value terms. If the present value of income is greater than the present value of costs, the investment can be said to be worthwhile.
Dictionary of banking and finance. 2015.
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discounted cash flow — /ˌdɪskaυntɪd kæʃ fləυ/ noun the calculation of the forecast return on capital investment by discounting future cash flows from the investment, usually at a rate equivalent to the company’s minimum required rate of return. Abbr DCF … Marketing dictionary in english