It is a laser based measuring device. You look through the viewfinder and point the sight at the top of the flag or to where you want the measurement and the laser bounces off it and back to the rangefinder telling you how far it is. They are extrememly accurate.
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A range finder is a handheld device, which you look through and it measures distances. It measures how far it is from where you are standing to what you point it at, such as a flag.