@wikipedia
A positive number (usually designated as "") showing how future cash value in time (usually 1 year) is related to the present cash value :
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F = P \cdot (1+r)^t |
The word " discount" means that a cash flow today is more valuable than identical cash flow in future because a present cash can be invested immediately and begin earning returns at rate , while a future flow cannot.
The value of discount rate is set by the corporate policy and usually related to the Weighted Average Cost of Capital
