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Discounted Cash Flow Analysis

Discounted Cash Flow (DCF) Analysis

Definition

A technique at the core of finance, where cash flow in the future is discounted due to uncertainty about future rates of return. The concept of the "time value of money" is at the heart of any DCF analysis. That is, money received now is better than money received in the future, and any investment must be evaluated against a baseline of other possible uses for that money.

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