So the discounted cash flow essential translates future cash flows into terms of today's dollars. The projected cash flow is an estimate of the cash flow for the current operating period or periods, usually short term and under 5 years. Cash flow is determined by the amount of cash, checks, payables/receivables, and so on that will be received through operations, so there is no formula. Less tangible items such as depreciation and salvage value are also included.
Cash can be generated or used by sales, loans, credit granted or received, owner funding, and so on. It can be projected on a company basis or a per project basis. Typically the projection is given in terms of net cash flow, so the cash expenses are subtracted from the income.
So as a simple example, let's say I have a project which purchases a computer for $5,000. After 3 years I will sell it for $500 and for simplification, I won't depreciate it. The project will have fixed expenses of $1,000 a year for 3 years. In year 1, my net cash flow is negative - ($6,000). In year 2 my net cash flow is ($1,000). In year 3 my net cash flow is ($500).
Notice the projects will mostly generate negative cash flow. This is because they are expending funds to create new products and services. When these products and services are sold, then they will contribute positive cash flow to the business.
To me, this is the heart of what Project Management can most positively contribute to. By keeping the project on track for budget, schedule, and scope, we assure that when the project is completed, the positive cash flows will be realized through the sales of the products and services.
In the earliest days of my career (pre-project management), I worked on a project that was essentially an R&D effort to create a super computer. Marketing and sales efforts worked in parallel to project future incomes and determine how many limited computers would be sold. The project suffered several key set backs: a major disconnect in how the hardware and software were designed to work together, several major flaws in the hardware design which had to be re-worked, a critical employee that was absent from the project at a critical time, and other delays. A point was reached where marketing and sales had determined that the competition had already made sales to key potential accounts and the number of units projected to sell kept dropping. To recover from the loss, the company cancelled the project and harvested key technologies from the project to create another computer (which wasn't super!). Sales of those were also less than projected and due to other key projects and sales issues, the company continued to decline and was eventually bought by another.
Whether or not project management best practices were used on the project are not entirely clear. However I would have to believe that given the time, an appropriate risk management assessment was not conducted (the concept of risk management barely existed at that time), some of the issues could have been foreseen and mitigated in time to save the project. For example, one key employee would never have been assigned to crititcal tasks without a backup.