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26 January, 22:41

Why are discounted cash flow methods of making capital budgeting decisions superior to other methods?

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  1. 26 January, 23:07
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    Discounted cash flow strategies consider the time value of the currency and consider all future cash flows.

    Explanation:

    Discounted cash flow approaches recognize the value of money, and take into consideration all investment returns, unlike other traditional capital budgeting approaches.

    Discounted cash flow is an accounting tool used to measure an investment's worth based on its future revenues. Discounted Cash Flow analyses are trying to figure out the value of the company now, based on estimates of how much revenue it will make in the future.
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