Discounted Cash Flow Calculater

Discounted Cash Flow (DCF) is a financial method used to estimate the value of an investment or a company based on the present value of its expected future cash flows. The idea is that money today is worth more than the same amount in the future due to the time value of money. By discounting future cash flows back to the present, using a discount rate (often the company’s cost of capital or a required rate of return), DCF helps determine whether an investment is worthwhile or a company’s intrinsic value.

In essence:

• Future cash flows are estimated.
• Discount rate is applied to account for the time value of money.
• The sum of these discounted cash flows gives the present value, or the value today.