What does the term 'discounting' refer to in NPV calculation?

این پی وی کیلکولیشن میں اصطلاح 'رعایت' کا کیا حوالہ ہے؟

Increasing future cash flows

Reducing future cash flows to present value

Ignoring cash flows

Adjusting cash flows for inflation

In NPV calculation, "discounting" means reducing future cash flows to their present value by applying a discount rate.

It converting them to today's dollars to evaluate a project's worth more accurately.