The Discounted Cash Flow (DCF) model is a financial valuation method that calculates the present value of expected future cash flows, considering the time value of money. It involves discounting projected cash inflows and outflows to determine the net present value of an investment. Residual Income Discounted Operation (RIDO) is a variant of DCF that focuses on residual income, representing the excess of actual earnings over a required rate of return, and discounts this residual income to determine the intrinsic value of an investment.
