Discounted Cash Flow Analysis Explained
Discounted Cash Flow (DCF) analysis evaluates project feasibility by considering both the magnitude and timing of cash flows. In the Standard Feasibility Module, all costs and revenues are allocated across defined periods and discounted to present value. This process produces key indicators such as NPV and IRR. DCF analysis provides a more accurate assessment of project viability than simple profit calculations. It is especially valuable for projects with long durations or staged cash flows.