Gina is calculating the present value of an inheritance she will receive in 10 years hen...
Gina is calculating the present value of an inheritance she will receive in 10 years hen she turns 25. The process she is using is called:
Group of answer choices
Compounding.
Accumulating.
Discounting.
Reducing.
Homework Answers
The correct option is Discounting
Present value of inflows=cash inflow*Present value of discounting factor(rate%,time period)
Hence such future cash flow is discounted at present value using specified interest rate for the specified time period and bought to the present terms.
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