DISCOUNTED CASH FLOW Definition

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DISCOUNTED CASH FLOW is a valuation method best used to evaluate a business established for the purpose of fulfilling a specific project, in certain startup and other companies where cash flow is more important than net income, and when a certain time frame is set where an investor wishes to see his investment returned over a specific period of time. In discounted cash flow, the present value of liabilities is subtracted from the combined present value of cash flow and tangible assets, which determines the value of the business.

Learn new Accounting Terms

UNDERABSORBED BURDEN is where total employee costs, other than salaries, have not been fully allocated to products sold or services offered.

PAID IN SURPLUS see PAID-IN-CAPITAL.

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