Discounted cash flow

Discounted cash flow is a term that you may well come across in the world of finance and accounts, but can be a little confusing if you're not quite sure what it is.

Effectively discounted cash flow is an accounting methodology that allowes the value at the present time to be estimated for what you expect to earn in the future. For instance, if you know you will get income from being paid interest and so on in the future, then using discounted cash flow accounting techniques, a value can be put on those for the market value at the present time.

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