Present Value of Free Cash Flow Definition & Application Wiki

Present Value of Free Cash Flow Definition & Application Wiki

Last Updated by WikiWealth

Short Definition

The result of applying the present value factor times the free cash flow generated by the operating entity.

Present value is the value on a given date of a future payment or series of future payments, discounted to reflect the time value of money and other factors such as investment risk. Present value calculations are widely used in business and economics to provide a means to compare cash flows at different times on a meaningful "like to like" basis.

Long Definition

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Source: http://en.wikipedia.org/wiki/Present_value