# present value

## Definitions

### Accounting

- noun the value now of a specified sum of money to be received in the future, if invested at current interest rates.
- noun a price which a share must reach in the future to be the equivalent of today’s price, taking inflation into
__account__

### 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

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