Discounted Cash Flows
Discounted Cash Flows refers to a financial valuation method used to estimate the value of an investment based on the projected future cash flows it is expected to generate. This technique involves discounting the projected cash flows back to their present value using a specified discount rate. The idea behind Discounted Cash Flows is that a dollar received in the future is worth less than a dollar received today, due to factors such as inflation and the opportunity cost of capital. This method is commonly used in determining the intrinsic value of a business or investment opportunity.