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What is discounted cash flow in project management?

April 26, 2017Cash flow discounted

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What is discounted cash flow in project management?

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The Discounted Cash Flow is a method for computing the Net Present Value. It is a method widely used in real estate and finance to determine the most favorable projects. A positive net present value is good and the highest net present value is normally considered the most favorable project. Basically DCF and NPV take into account the time value of money. Future cash values are estimated, and then discounted to compute the present values of the cash flows. The net present value is the sum of all future cash flows at the discounted rate.