Discounting, time and value. Variability or preference

Ioan Alin Nistor
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Ioan Alin Nistor: Babes-Bolyai University Cluj-Napoca

Finante - provocarile viitorului (Finance - Challenges of the Future), 2010, vol. 1, issue 12, 174-177

Abstract: Investment decisions depend very much on a correct forecast of cash flows and an appropriate discount rate. At a first view, it does not seem to be too difficult to carry out the theoretical criteria. But how do we discount the cash-flows? How do we find the appropriate discount rate? The paper tries to evaluate some of these aspects from a behavioral point a view. As discounts rates are not constant over a period of time, they will be influenced by time and confidence. Biased by the economic environment the individual will discount the future cash-flows different. Thus, the paper will have a look at the relation between discounting, time and value.

Keywords: investment decisions; discount rate; cash-flows; economic environment (search for similar items in EconPapers)
JEL-codes: G30 G31 G32 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:aio:fpvfcf:v:1:y:2010:i:12:p:174-177

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