The discount factor of a company is the rate of return that a capital expenditure project must meet to be accepted. It is used to calculate the net present value of future cash flows from a project ...

The discount rate refers to the interest rate used when calculating the net present value (NPV) of an investment. It represents the time value of money, which is the concept that a sum of money today ...

Calculate the present value of each year's cash flow by dividing by (1 + discount rate)^number of years. Sum all present values to find the total value of projected cash flows, which in this example ...

The market price of a stock doesn't necessarily reflect its intrinsic value. Several economic theories use different approaches toward valuing companies, but one of the simplest involves calculations ...

A discounted cash flow, or DCF, analysis measures the value of a business or project, such as a new factory for your small business. This value equals the sum of all of the project's future annual ...

David Kindness is a Certified Public Accountant (CPA) and an expert in the fields of financial accounting, corporate and individual tax planning and preparation, and investing and retirement planning.

Discover how discounted future earnings are used to estimate a company's size by analyzing forecasted earnings and terminal values, discounted to present value.

The basic premise of finance is that money has time value -- a dollar in hand today is worth more than a dollar in the future. The study of finance seeks to make it possible to compare the value of a ...