Discounted cashflow - A formula closely related to Net Present Value which springs from the idea that £1 received in ten years" time is not worth as much as £1 received now because the £1 received now could be invested for those ten years and compound into a higher value.Discounted cashflow applies a discount rate to future cashflows to establish their present worth. Added to the company"s terminal value (i.e. what you"d get if you sold its assets), this gives you a total value for the whole business.
Discounted cashflow : a formula closely related to net present value which springs from the idea that £1 received in ten years" time is not worth as much as £1 received now because the £1 received now could be invested for those ten years and compound into a higher value.discounted cashflow applies a discount rate to future cashflows to establish their present worth. added to the company"s terminal value (i.e. what you"d get if you sold its assets), this gives you a total value for the whole business.
Discounted cashflow