Discounted cash flow is a way of calculating the current value of future sums of money. Future cash flows are estimated and then discounted to give their current value, or net present value. The approach requires the use of a discount rate, to discount the future cash flows. For riskier projects a higher discount rate should be used. Future cash flows may not occur to the value anticipated, or when the calculations assume they will happen. Despite these problems, discounted cash flow is widely used as a means of investment appraisal. See also Investment Appraisal and Net Present Value.
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Discover the world’s largest Glossary of Procurement terms
With over 800 Procurement specific terms (and growing) you will find everything you need to know or thought you knew about the Procurement function. Our aim is to provide you with a comprehensive list collated from the Comprara Groups hub of training and consulting source materials.The Procurement Glossary has been compiled by industry expert Paul Rogers.
