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Discounting, time and value. Variability or preference

Author

Listed:
  • Ioan Alin NISTOR

    (Babes-Bolyai University Cluj-Napoca)

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.

Suggested Citation

  • Ioan Alin NISTOR, 2010. "Discounting, time and value. Variability or preference," Finante - provocarile viitorului (Finance - Challenges of the Future), University of Craiova, Faculty of Economics and Business Administration, vol. 1(12), pages 174-177, December.
    • Handle: RePEc:aio:fpvfcf:v:1:y:2010:i:12:p:174-177
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    File URL: http://feaa.ucv.ro/FPV/012-22.pdf
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    Citations

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    Cited by:

    1. Ioan Pop, 2012. "Taxation, Internationalization And Fiscal Harmonization," JOURNAL STUDIA UNIVERSITATIS BABES-BOLYAI NEGOTIA, Babes-Bolyai University, Faculty of Business.
    2. Nicolae Marinescu & George Florin Vasiluta, 2012. "Competition Policy in the European Union: The Lidl/ Plus Acquisition Case in Romania," JOURNAL STUDIA UNIVERSITATIS BABES-BOLYAI NEGOTIA, Babes-Bolyai University, Faculty of Business.
    3. Armela-Linda Rahovan, 2012. "Sustainable Practices In Transylvanian Hotels," JOURNAL STUDIA UNIVERSITATIS BABES-BOLYAI NEGOTIA, Babes-Bolyai University, Faculty of Business.
    4. Mihaela Tutunea, 2012. "Internet Mobile Users From Romania And Mobile Apps," JOURNAL STUDIA UNIVERSITATIS BABES-BOLYAI NEGOTIA, Babes-Bolyai University, Faculty of Business.
    5. Corina Gavrea & Roxana Stegerean & Liviu Ilies, 2012. "Business Strategy, Structure And Organizational Performance," JOURNAL STUDIA UNIVERSITATIS BABES-BOLYAI NEGOTIA, Babes-Bolyai University, Faculty of Business.

    More about this item

    Keywords

    investment decisions; discount rate; cash-flows; economic environment;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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