Discounted Cash Flow

A financial expression of the estimated current value of future cash flow. This measurement helps to estimate the current value of a property, based on its future earnings. By comparing this current value estimate with the projected development cost, the real estate investor can analyze the profitability of the investment. This calculation begins with the projected future cash flow, and then reduces that cash flow by the discount rate. For more information, see the "Real Estate Investment Analysis Tools" article in the "Real Estate Investing"

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