Discounting
A) is the process of determining value at a future time.
B) is the process of converting future cash flows to their present value.
C) is a process that doers not consider the time value of money.
D) is a process that can only be used for a single amount (not annuities).

Question

Quizplus · Accepted Answer

Discounting is the process of converting future cash flows to their present value by considering the time value of money. Choice A is incorrect because determining value at a future time is not necessarily the same as discounting. Choice C is incorrect because discounting explicitly considers the time value of money. Choice D is incorrect because discounting can be used for annuities as well as single amounts.