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discount
(redirected from Discount factor)

   Also found in: Medical, Legal, Financial, Acronyms, Encyclopedia, Wikipedia 0.03 sec.

discount

Reduction in the price of an item. For example, goods are discounted in price during a sale. Discounting is a form of competition used by companies to increase sales and market share. Discounts can also be given for buying in bulk, and this then becomes a source of economies of scale for the buying organization.

The term is also used to describe the equivalent present value of a sum payable or receivable in the future; for example, if the rate of interest is 5% and the sum of £105 is payable in a year's time, then its discounted present value is £100.



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? Mentioned in ? References in periodicals archive
 
Step Three (Column C): Multiply the cash flow in column A with the discount factor in column B to determine the net present value of each cash flow.
The court applied a 12% discount on the grounds that (1) the IRS had effectively conceded that a discount factor of up to 12% would be appropriate and (2) the estate failed to prove that a figure greater than 12% would be appropriate.
This are known as the discount factor and can be calculated using most spreadsheet applications.
 
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