{"id":5916,"date":"2022-06-20T18:10:48","date_gmt":"2022-06-20T16:10:48","guid":{"rendered":"https:\/\/www.consultingcheck.com\/topics\/discounting-future-earnings\/5916"},"modified":"2022-11-09T10:42:18","modified_gmt":"2022-11-09T09:42:18","slug":"discounting-future-earnings","status":"publish","type":"jask_topic","link":"https:\/\/www.consultingcheck.com\/en\/topics\/discounting-future-earnings\/5916\/","title":{"rendered":"Discounting Future Earnings"},"content":{"rendered":"\n

The value of the income from five years is then the expected future income, discounted by the discount factor taking into account the duration.<\/p>\n\n\n\n

Example: A company is expected to generate income of EUR 100 thousand in each of the next 5 years. Then, the present value of these future earnings equals 100 TEUR\/(1+0.099)1+100 TEUR\/(1+0.099)2 + 100 TEUR\/(1+0.099)3 = (91 + 83 + 75 + 68 + 62) TEUR = 379 TEUR. Discounting results in a reduction of approximately 1\/3 when considering 5 years in this example.<\/p>\n\n\n\n

Finally, the expected earnings<\/a> for the time beyond the planning horizon must be taken into account.<\/p>\n","protected":false},"featured_media":0,"parent":5911,"menu_order":37700,"template":"","meta":{"_links_to":"","_links_to_target":""},"jask_topic_categories":[1035],"class_list":["post-5916","jask_topic","type-jask_topic","status-publish","hentry","jask_topic_categories-abzinsung-von-planertraegen-en"],"yoast_head":"\nCorrectly discounting planned income- consultingcheck<\/title>\n<meta name=\"description\" content=\"The value of the income from five years, the so-called planned income, must be correctly discounted. 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