B5 Discounted Cash Flow
Unit 7: Business Decision Making
Discounted cash flow is a method that can be used to assess the viability of a project based on the current value the future cashflows received as a result of the project.
Future cash flows are multiplied by the discount factor to determine the present value of the money received. The initial cost of the project is then subtracted. If this value is negative, this would not be seen as a viable investment.
