Discounting is the process of reducing future values to present values.

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Discounting is a common financial concept used to compare the value of money at different points in time. It involves the calculation of the present value of a future cash flow or stream of cash flows. This is done to reflect the time value of money, which recognizes that a dollar available today is worth more than the same dollar if it is received in the future.

Discounting Is the Process of Reducing Future Values to Present