Undiscounted future cash flows
/What are Undiscounted Future Cash Flows?
Undiscounted future cash flows are cash flows expected to be generated or incurred by a project, which have not been reduced to their present value. This condition may arise when interest rates are so near zero or expected cash flows cover such a short period of time that the use of discounting would not result in a materially different outcome.
You may elect to use undiscounted future cash flows when developing a rough estimate of the cash flows associated with a short-term or medium-term project, just to see if there may be sufficient positive cash flows to warrant a more detailed investigation. If so, be sure to use discounting as part of a more refined second pass, to ensure that the cash flows are indeed sufficient to justify investing in the project.