present value

Definitions

Accounting

Construction

  • The value of a benefit or cost found by discounting future cash flows to the base time. Also, the system of comparing proposed investments, which involves discounting at a known interest rate (representing a cost of capital or a minimum acceptable rate of return) in order to choose the alternative having the highest present value per unit of investment.

Economics

  • noun the value of something in the future, shown in current terms. If interest is running at 5 per cent per annum, the sum of £100 will be worth £105 in one year’s time; alternatively, £105 next year has a present value of £100.

Health Economics

  • (written as Present Value)
    The value at a particular point in time of a future flow of income, health, etc.
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