The same concept of discounting is used to value and price financial assets.
Discounting is the primary factor used in pricing a stream of tomorrow's cash flows.
What it actually means: When a guy says he's of average height, it means he's one to two inches shorter than average height.
When a girl says she's of average height, it means she's one to two inches taller than average height.
The value of those future cash flows in today's terms is calculated by applying a discount factor to future cash flows.
When a car is on sale for 10% off, it represents a discount to the price of the car.