what is an example of a dcf calculation 
you have a discount rate of 10 and an investment opportunity that would produce 100 per year for the following three years your goal is to calculate the value today the present value of this stream of future cash flows since money in the future is worth less than money today you reduce the present value of each of these cash flows by your 10 discount rate specifically the first year s cash flow is worth 90 91 today the second year s cash flow is worth 82 64 today and the third year s cash flow is worth 75 13 today adding up these three cash flows you conclude that the dcf of the investment is 248 68 