Talk:Discounting/Archives/2012
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Cash flows and utility
As written this article privileges cash flows over utility flows. However, cash flows are only an example of utility flows: in general, for firms, we assume that utility = profit. Any comments, or should I go ahead and change the article? Tobacman 02:20, 8 December 2006 (UTC)
bad debts ladger
Under which ladger bad debts entry can be enterred
Separate risk-free vs Speculative, also definition seems incorrect
The page confuses the PV of the cashflow/value as determined by the available market deposit 'risk free' rates with the rates as may be applied to value "speculative" future cashflows, which include factors that are risk-related.
Suggest that the principle is separated from the specific cases or types of discounting, and that sections differentiate between risk-free/investment discounting and speculative discounting The former is applied in different cases to the latter
I am sure there are many pages that can explain the details of each principle.
With regards to the definition, it seems odd to define discounting in terms of a right. "obtains the right to delay payments" This right sounds like a loan or forward contract.
Discounting is defined as "To deduct or subtract from a cost or price." Thus in this context it is to ADJUST the cost/price/value of a future cost/price/value to reflect the present value of that future cost/price/value and this therefore accounts for the possibility that $1 today has greater value than $1 tomorrow
The term relates to the Adjustment process alone, not the right to delay payment — Preceding unsigned comment added by Edmaher (talk • contribs) 12:12, 20 January 2011 (UTC)