Editing Discounted cash flow (section)

==History==
Discounted cash flow calculations have been used in some form since money was first lent at interest in ancient times. Studies of ancient [[Ancient Egyptian mathematics|Egyptian]] and [[Babylonian mathematics]] suggest that they used techniques similar to discounting future cash flows.{{Citation needed|date=February 2025}} Modern discounted cash flow analysis has been used since at least the early 1700s in the UK coal industry.<ref>{{cite journal|author=Susie Brackenborough |author2=Tom McLean |author3=David Oldroyd |title=The Emergence of Discounted Cash Flow Analysis in the Tyneside Coal Industry c.1700-1820. |journal=[[British Accounting Review]] |volume=33 |issue=2 |pp=137-155 |doi=10.1006/bare.2001.0158 |date=2001}}</ref>

Discounted cash flow valuation is differentiated from the accounting [[book value]], which is based on the amount paid for the asset.<ref>{{Cite book|title=The Exact Sciences in Antiquity |author=[[Otto Eduard Neugebauer]] |publisher=Dover Publications |year=1969 |isbn=978-0-486-22332-2 |p=33}}</ref> Following the [[Wall Street crash of 1929|stock market crash of 1929]], discounted cash flow analysis gained popularity as a valuation method for [[capital stock|stock]]s. [[Irving Fisher]] in his 1930 book ''The Theory of Interest'' and [[John Burr Williams]]'s 1938 text ''[[The Theory of Investment Value]]'' first formally expressed the DCF method in modern economic terms.<ref>Fisher, Irving. "The theory of interest." ''New York'' 43 (1930).</ref>