The discount factor, also known as the present-value factor, is a figure used to determine the present value of future cash flows by considering the time value of money and a specific hurdle rate.
Present value, also known as discounted value, is the current worth of a sum of money or a stream of cash flows that will be received or paid in the future, calculated using a specific discount rate. It is an essential concept in finance, particularly in discounted cash flow (DCF) analysis.
The present-value factor is an accounting term that represents the multiplier used to determine the present value of a series of future cash flows, considering a specific discount rate.
