Financial management theory and practice by Eugene Brigham and Michael Ehrhardt. Chapter 8. Time Value of Money

DCF analysis
Discounted cash flow
What do you call the process of changing present values into future ones
Present and future values and the concept of indifference
$100 dollars today, if the interest rate is 5%, is the same as $127.63 paid five years from today. If you could buy that future security for less than $100, it’s a deal. Because what you’d get for putting your $100 into a risk free CD at 5% is only the $127.63. In other words, if you buy the security at less than $100 and still receive the same $127.63, you got a deal.
What’s the reverse of compounding?
Discounting, in other words turning future values into present ones.

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