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Discounted cash flow (DCF) is a valuation method used to estimate the value of an investment based on its expected future cash flows. DCF analysis attempts to figure out the value of an investment today, based on projections of how much money it will generate in the future.

This applies to the decisions of investors in companies or securities, such as acquiring a company, investing in a technology startup, or buying a stock, and for business owners and managers looking to make capital budgeting or operating expenditures decisions such as opening a new factory or purchasing or leasing new equipment.