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Real Estate Glossary

Discounted Cash Flow

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Written by Luis Escobar

This is a toll in investment analysis that is often used by real estate professionals to make decisions on development investment and to determine whether or not to hold, buy, and sell. The (DCF) discounted cash flow analysis attempts to determine the value of an asset today. It is based on the projections of how much the asset will generate in the future. To calculate this, get the sum of the cash flow in each period and divide it by 1 plus the discount rate raised to the power of the specified period number.

This is a toll in investment analysis that is often used by real estate professionals to make decisions on development investment and to determine whether or not to hold, buy, and sell. The (DCF) discounted cash flow analysis attempts to determine the value of an asset today. It is based on the projections of how much the asset will generate in the future. To calculate this, get the sum of the cash flow in each period and divide it by 1 plus the discount rate raised to the power of the specified period number.

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Luis Escobar

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