Discounting
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.
