Method discounting cash flow (DCF) is analyzed in the article. Article is demonstrating complete economic insolvency DCF. The fallacy of discounting method causes serious distortion of the results. It’s wide usage entails negative consequences not only for the concrete investor, but also for the economy on the whole. The new method of the phased approach to time value of money in economic analysis of investment is represented in our article. The recommended phased method of allowing for the time factor is distinguished by: • reducing investment projects’ (IP) cash flow to two evaluation aspects: investments by investment stage completion and cash flow by maintenance completion; • allowing for investment stage fund freezing; • exchange of discount factors for the financial market’s capital accrual rate. To test operability of allowing for the time factor in modeling IP economic flows, banks’ feasibility study of credit repayment was used.
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