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Continuous Discounting

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Definition of Continuous Discounting

Continuous Discounting Image 1

Continuous Discounting

The process of calculating the present value of a stream of future
cash flows by discounting over a continuous period of time



Related Terms:

continuous budgeting

a process in which there is a rolling
twelve-month budget; a new budget month (twelve months
into the future) is added as each current month expires


Continuous compounding

The process of accumulating the time value of money forward in time on a
continuous, or instantaneous, basis. Interest is earned continuously, and at each instant, the interest that
accrues immediately begins earning interest on itself.


Continuous Compounding

The process of continuously adding interest to a principal plus
interest amount and calculating the resulting compound amount


continuous improvement

an ongoing process of enhancing employee task performance, level of product quality, and level of company service through eliminating nonvalue-added activities to reduce lead time, making products
(performing services) with zero defects, reducing
product costs on an ongoing basis, and simplifying products
and processes


continuous loss

any reduction in units that occurs uniformly
throughout a production process



Continuous random variable

A random value that can take any fractional value within specified ranges, as
contrasted with a discrete variable.


Discounting

Calculating the present value of a future amount. The process is opposite to compounding.


Continuous Discounting Image 2

Discounting

The process of calculating the present value of a stream of future
cash flows


discounting

the process of reducing future cash flows to present value amounts


Discounting

Calculating the present value of a future payment.


Discounting

The process of finding the present value of a series of future cash flows. discounting is the reverse of compounding.


Discounting of Accounts Receivable

Short-term financing in which accounts receivable are used as collateral to secure a loan. The lender does not buy the accounts receivable but simply uses them as collateral for the loan. Also called pledging of accounts receivable.



 

 

 

 

 

 

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