MANAGEMENT

Detailed explanation-1: -Discounted cash flow helps investors evaluate how much money goes into the investment, the timing of when that money is spent, how much money the investment generates, and when the investor can access the funds from the investment.

Detailed explanation-2: -You can use discounting cashflow to evaluate potential investments. There are two types of discounting methods of appraisal-the net present value (NPV) and internal rate of return (IRR).

Detailed explanation-3: -Discounted cash flow uses a discount rate to determine whether the future cash flows of an investment are worth investing in or whether a project is worth pursuing. The discount rate is the risk-free rate of return or the return that could be earned instead of pursuing the investment.

Detailed explanation-4: -Discounted cash flow DCF analysis determines the present value of a company or asset based on the value of money it can make in the future. The assumption is that the company or asset is expected to generate cash flows in this time frame. In other words, the value of money today will be worth more in the future.