Difference between revisions of "Discounting"
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:[[Discounting]]. The process of finding the present value of a cash flow or a series of cash flows; discounting is the reverse of [[compounding]]. | :[[Discounting]]. The process of finding the present value of a cash flow or a series of cash flows; discounting is the reverse of [[compounding]]. | ||
According to [[Macroeconomics by Mankiw (7th edition)]], | According to [[Macroeconomics by Mankiw (7th edition)]], | ||
| − | [[Discounting]]. The reduction in value of future expenditure and receipts, compared to current expenditure and receipts, resulting from the presence of a positive interest rate. | + | :[[Discounting]]. The reduction in value of future expenditure and receipts, compared to current expenditure and receipts, resulting from the presence of a positive interest rate. |
==Related concepts== | ==Related concepts== | ||
Latest revision as of 14:36, 2 July 2020
Discounting is the process of finding the present value of a single payment or series of payments.
Definitions
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Discounting. The process of finding the present value of a single payment or series of payments.
According to Fundamentals of Financial Management by Eugene F. Brigham and Joel F. Houston (15th edition),
- Discounting. The process of finding the present value of a cash flow or a series of cash flows; discounting is the reverse of compounding.
According to Macroeconomics by Mankiw (7th edition),
- Discounting. The reduction in value of future expenditure and receipts, compared to current expenditure and receipts, resulting from the presence of a positive interest rate.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
