# Definition of 'present value of future cash flows'

## present value of future cash flows in Accounting (prɛzənt vælyu əv fyutʃər kæʃ floʊz)

noun

( Accounting : Basic )

cash flow, valueThe present value of future cash flows is a method of discounting cash that you expect to receive in the future to the value at the current time.

SIMILAR WORDS:

discounted value of future cash flows

They use information about the degree of risk associated with any investment to derive
a discount rate appropriate for estimating the present value of future cash flows, which is the basis of most asset pricing models.

If no comparable market prices exist, the present value of future cash flows should be used as a measure of fair value.

The present value of future cash flows is a method of discounting cash that you expect to receive in the future to the value
at the current time.

Collins English Dictionary. Copyright © HarperCollins Publishers

## present value of future cash flows in Finance (prɛzənt vælyu əv fyutʃər kæʃ floʊz)

noun

( Finance : Economics )
The present value of future cash flows is a method of discounting cash that you expect to receive in the future to the value
at the current time.

The present value of future cash flows is a method of discounting cash that you expect to receive in the future to the value
at the current time.

Information about the risks of any investment is used to derive a discount rate appropriate
for estimating the present value of future cash flows, which is the basis of most asset pricing models.

If no comparable market prices exist, the present value of future cash flows should be used as a measure of fair value.

Collins English Dictionary. Copyright © HarperCollins Publishers

## Source

Definition of

**present value of future cash flows**from the Collins English Dictionary
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