The discounted cash flow methods explicitly recognize the effects of the time value of money and in that way measure economic value or investment worth as a true interest rate. The basic concept is that investment cost is a cash outflow at present value, and the related cash inflows necessarily are future values. These future cash inflows must be discounted to their present values so that they can be appropriately subtracted, added, and compared with investment cost. The true rate of interest for any investment is the rate that will discount the future net cash inflows to a sum that exactly equals the investment cost. Discounting a future amount to the present involves the concept of present value.