DCF Calculator: Calculate Investment Value from Future Cash Flows

Calculator

Enter Your Investment Details

Initial Investment ($)

Enter the initial investment amount.

Discount Rate (%)

Enter the discount rate as a percentage.

Growth Rate (%)

Enter the expected growth rate as a percentage.

Number of Years

Enter the number of years for the projection.

1 DCF Formula

2 How to Calculate DCF

3 DCF - Practical Examples

Concept

DCF Formula

The Discounted Cash Flow (DCF) method is a valuation technique used to estimate the value of an investment based on its expected future cash flows. The DCF formula discounts these future cash flows to their present value using a discount rate.

Formula:

PV = CF1/(1+r)^1 + CF2/(1+r)^2 + ... + CFn/(1+r)^n

Where:

PV = Present Value
CF = Cash Flow for each period
r = Discount rate
n = Number of periods

Steps

How to Calculate DCF

To calculate DCF, follow these steps:

1
Determine the initial investment amount
2
Estimate future cash flows for each period
3
Choose an appropriate discount rate
4
Calculate the present value of each cash flow
5
Sum up all present values to get the total DCF

Examples

DCF - Practical Examples

Example 1 Small Business Investment

Initial Investment: $100,000
Annual Cash Flow: $20,000
Growth Rate: 5%
Discount Rate: 10%
Period: 5 years

Present Value ≈ $83,333

Example 2 Real Estate Investment

Initial Investment: $500,000
Annual Cash Flow: $50,000
Growth Rate: 3%
Discount Rate: 8%
Period: 10 years

Present Value ≈ $335,000

Example 3 High-growth Startup

Initial Investment: $1,000,000
Annual Cash Flow: $200,000
Growth Rate: 15%
Discount Rate: 20%
Period: 5 years

Present Value ≈ $1,200,000

Discounted Cash Flow (DCF) Calculator