Present value computations are also called discounting.

Name: Present value computations are also called discounting.
Brand: Quizplus
Rating: 4.7 (34 reviews)

Question

Quizplus · Accepted Answer

Present value computations involve discounting future cash flows back to their present value using a discount rate. This is because money received in the future is worth less than the same amount of money received today due to inflation and the opportunity cost of using that money now. Therefore, present value computations are also referred to as discounting.

Present Value Computations Are Also Called Discounting