BUDGETING Definition

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BUDGETING is the documenting of intended expenditures over a specified time period (normally one year) along with proposals for how to meet them. See also ZERO BASED BUDGET.

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ASK PRICE, in the context of the over-the-counter market, the term "ask" refers to the lowest price at which a market maker will sell a specified number of shares of a stock at any given time. The term "bid" refers to the highest price a market maker will pay to purchase the stock. The ask price (also known as the "offer" price) will almost always be higher than the bid price. Market makers make money on the difference between the bid price and the ask price. That difference is called the "spread".

PRESENT VALUE is the discounted value of a payment or stream of payments to be received in the future, taking into consideration a specific interest or discount rate. Present Value represents a series of future cash flows expressed in todays dollars. A given amount of money is almost always more valuable sooner than later, so present values are generally smaller than corresponding future values.

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