Discounted Cash Flow Calculator
The Discounted Cash Flow (DCF) Calculator is a financial tool designed to evaluate the present value of future cash flows. It considers the time value of money, recognizing that the value of money decreases over time due to factors like inflation and the opportunity cost of not having the funds available for other investments.
Users input key parameters into the calculator, including the cash flow per period, the discount rate (representing the required rate of return or the cost of capital), and the number of periods. The calculator then applies the DCF formula to estimate the current value of the future cash flows, providing a valuable metric for investment analysis and financial decision-making. The DCF method is widely used in corporate finance, investment valuation, and capital budgeting to assess the attractiveness of an investment by comparing its present value to its cost.
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