Purpose: The paper discusses the problematic aspects of the valuation of a property or related investment project using the discounted cash flow (DCF) analysis. The exact formula of the method is obtained taking into account the variability of the discount rate.

Design/methodology/approach: Well-known formulas of DCF analysis were refined in the case of the discount rate variability using the induction method.

Findings: The exact formulas of the DCF method with a variable discount rate are obtained.

Originality/value: The use of the obtained exact formulas reduces the calculation error from using the traditional formula with a constant discount rate.