Question
No. I don't agree with this statement. Discounted cash flow (DCF) is a valuation method that uses predicted future cash flows to determine the value
No. I don't agree with this statement. Discounted cash flow (DCF) is a valuation method that uses predicted future cash flows to determine the value of an investment. The goal of a DCF analysis is to calculate how much money an investor would get from a given investment after accounting for the time value of money. Using a discount rate, DCF analysis determines the present value of predicted future cash flows. The notion of present value of money can be used by investors to analyse if the future cash flows of a project or investment are equal to or higher than the initial investment. This pertains to decisions made by investors in firms or assets, such as acquiring shares or purchasing a company, as well as capital budgeting decisions made by business owners and managers.
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