When evaluating any offer, follow the general advice that if the deal seems too good to be true, it probably is. While you can certainly find good deals on Craigslist, common sense can help you distinguish the truly good deals from the scams. Read the listing carefully. If the person gives a reason why they are selling the item for the amount, put yourself in that position and imagine what you would do. You can pretty quickly spot a scam this way. For example, suppose someone is selling a relatively new car for an extremely low price. They claim this is because they were awarded the car in their divorce and have no use for it. However, if you were in that position, you probably would still want to get as much as you could for the car. Since the person's divorce is supposedly finalized, the sale of the car would not affect it. Many scammers are not native English speakers, so their listings will be riddled with errors. The occasional typo or error is to be expected since these listings are created by members of the general public, not professionals (in most cases). However, a significant number of grammatical errors and basic spelling errors is suspect. This is especially important if you're looking at job listings. Someone who wants you to work for their business would typically be more careful and polished about their listing than someone who was selling an old piece of furniture or a few boxes of clothes. Keep in mind that there are plenty of people living in the US and Canada who are not native English speakers and may post a legitimate listing on Craigslist. If the post contains a lot of errors but seems legit, consider sending the person a message and mentioning the errors or asking if English is their first language. Scammers often place the same listing on the Craigslist sites for multiple cities. If you're suspicious of a listing, go to the Craigslist for a few other cities and search for the same title or wording. This is particularly common with real estate and rental scams. For example, a scammer may list a 3-bedroom, 2.5 bath house for rent at half the market rate for such a dwelling in your area. You may see the same house listed for rent in multiple other cities. Look for this tactic to be combined with a scarcity tactic. The listing may imply that supplies of a particular item are limited, but the person may have posted a duplicate listing in a dozen different places. Because Craigslist is designed to be a local marketplace, you should have the opportunity to see the thing being sold or leased in person before you commit. If the person is unwilling to let you see it before you give them money for it, you're likely dealing with a scammer. If the person cannot meet with you or wants to get a third person to meet with you, this could be evidence of a scam. If the person is not available at a particular time, try to work out a time when both of you are available. If the person lives further away or claims to be out of town temporarily, this can also be evidence of a scam. If they weren't in your area, they shouldn't have posted a listing on your local Craigslist until they returned. Craigslist scammers, like other scammers, often pressure you to make a decision quickly. They may imply that they are in some sort of emergency and need to complete the exchange quickly. They will often try to appeal to your compassion and empathy to get you to complete the exchange without looking too closely. For example, a scammer might claim that they've had a recent death in their family and need to complete the transaction as soon as possible. Or, they may have another person contact you and claim the original person had an accident and is in the hospital and they need to take over the transaction instead. Tell the person that you need a few days to decide whether to go through with the transaction. Do an online search using any of the details you know to see if there are any complaints about the person or if the listing has been used before. These are signs that the listing is a scam.

Summary: Consider whether the deal seems too good to be true. Take note of excessive errors in grammar and spelling. Look for duplicate listings in other places. Check out the item or property offered in person before you buy it. Take your time to decide on an exchange.

In its simplest form, the DCF formula is DCF=CFn(1+r)n{\displaystyle { ext{DCF}}={
rac {CF_{n}}{(1+r)^{n}}}}. In the formula, CFn{\displaystyle CF_{n}} refers to the future value of the cash flow for year n and r represents the discount rate. For example, using the first year of the example investment from the part "Gathering Your Variables," the present value of that cash flow for $1,000 after one year, using the discount rate of 9 percent, would be represented as: DCF=$1,000(1+0.09)1{\displaystyle { ext{DCF}}={
rac {\$1,000}{(1+0.09)^{1}}}}. The discount rate must be represent as a decimal rather than by a percentage. This is done by dividing the discount rate by 100. Therefore, the 9 percent rate from above is shown as 0.09 (9100{\displaystyle 9\div 100}) in the equation. The total value of discounted cash flows for an investment is calculated as the present values of each cash flow. So, the other cash flows must be added to the calculation in the same method as the first one. For the previous example, we would add the $2,000 and $3,000 payments at the end of the second and third years to the equation. In total, this gives: DCF=$1,000(1+0.09)1+$2,000(1+0.09)2+$3,000(1+0.09)3{\displaystyle { ext{DCF}}={
rac {\$1,000}{(1+0.09)^{1}}}+{
rac {\$2,000}{(1+0.09)^{2}}}+{
rac {\$3,000}{(1+0.09)^{3}}}} Solve your equation to get your total discounted value. The result will be the present value of your future cash flows. Start by adding the discounted rate to the 1 within parentheses: This gives DCF=$1,000(1.09)1+$2,000(1.09)2+$3,000(1.09)3{\displaystyle { ext{DCF}}={
rac {\$1,000}{(1.09)^{1}}}+{
rac {\$2,000}{(1.09)^{2}}}+{
rac {\$3,000}{(1.09)^{3}}}} From there, calculate the exponent. This is done by raising the "1.09" in parentheses to the power above it (1,2, or 3). Solve this by either typing "[lower value]^[exponent]" into Google or using the exponent button, xy{\displaystyle x^{y}} on a calculator. After solving the exponent, the equation will be: DCF=$1,0001.09+$2,0001.1881+$3,0001.295029{\displaystyle { ext{DCF}}={
rac {\$1,000}{1.09}}+{
rac {\$2,000}{1.1881}}+{
rac {\$3,000}{1.295029}}} Next, divide each cash flow by the number underneath it. This yields: DCF=$917.43+$1,683.36+$2,316.55{\displaystyle { ext{DCF}}=\$917.43+\$1,683.36+\$2,316.55} Finally, add up the present values to get the total, which is DCF=$4,917.34{\displaystyle { ext{DCF}}=\$4,917.34}. In some cases it may be necessary to change the discount rate used to account for changes to expectations, risk, or taxes. For example, businesses analyzing a project might add a risk premium on to the discount rate used to discount the cash flows from a risky project. This artificially lowers the returns to account for risk. The same might be done for a very long time window between the present and the future cash flows to account for uncertainty. Discount rates may be converted to real rates (rather than nominal rates) by removing inflation from the discount rate. A spreadsheet program, such as Excel, has functions that can help with these calculations.
Summary: Set up your equation. Add up all discounted cash flows. Arrive at the discounted value. Adjust your discount rate.