The present value of a future cash flow is calculated by dividing the future cash flow by a discount factor that incorporates the amount of time that will pass and expected interest rates.

Image source: Getty Images. First, let's break down the formula for the present value of an investment based on future cash flows. From this fundamental formula, we'll rearrange the terms to give ...

Present-value calculations are also used in valuing bonds, loans, and mortgages, and in making investment decisions by comparing cash flows that occur at different times. Future-value calculations ...

"The present value of future cash flows declines. This in turn has an impact on what multiple investors are willing to pay for a specific unit of earnings," says Gerald Goldberg, CEO and co ...

Generally we assume that a dollar today is more valuable than a dollar in the future, so we need to discount the sum of these future cash flows to arrive at a present value estimate: ...

Unlike traditional return calculations, IRR takes into account cash flow — the money coming ... is equal to the present value of all future cash inflows (money brought in) as a result of the ...

We generally believe that a company's value is the present value of all of the ... and so the sum of these future cash flows is then discounted to today's value: ...