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Cash flow, in general, refers to payments made into or out of a business, project, or financial product.[1] It can also refer more specifically to a real or virtual movement of money.
Cash flows are narrowly interconnected with the concepts of value, interest rate, and liquidity. A cash flow that shall happen on a future day tN can be transformed into a cash flow of the same value in t0. This transformation process is known as discounting, and it takes into account the time value of money by adjusting the nominal amount of the cash flow based on the prevailing interest rates at the time.
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