Difference between revisions of "Discounting"
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According to [[Fundamentals of Financial Management by Eugene F. Brigham and Joel F. Houston (15th edition)]], | 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]]. | :[[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== | ==Related concepts== | ||
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*[[Introduction to Financial Management]]. | *[[Introduction to Financial Management]]. | ||
| − | [[Category: Financial Management]][[Category: Articles]] | + | [[Category: Financial Management]][[Category: Articles]][[Category: Economics]] |
Revision as of 14:32, 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.
