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Present-Value Short Cuts.

M. Richard Sussman

Associate Professor of Finance, Pennsylvania State University, Department of Finance. 1

The Accounting Review 1965

In this article, the author deals with the problem of computing the present value short cuts of a series of estimated future inflows at a given rate of discount. The concept of present value has permeated most areas of business decision-making. However, when considering this factor, the businessman is faced with the problem of numerous mathematical computations. Granted that they are mechanical in nature, nevertheless, until these computations are completed, the influence of the present value concept cannot be determined and related decisions cannot be made. The services of a modern computer are particularly desirable when the calculations are extremely numerous and highly complex, and when extreme accuracy is required. However, this offers little comfort to the business executive at his desk, the investor in his home, or the professor or student in the classroom who, for one reason or another, does not have access to a computer and who may require only reasonable accuracy in solving problems of valuation.

DOI
10.2308/tar-4493779
Volume
40 (2)
Pages
407-413
Language
en
Export
BibTeX
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