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Discount rate

Created by Arthur Aslanyan (Nafta College), last modified on Apr 04, 2020

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A positive number (usually denoted as

$\begin{array}{l}r\end{array}$ ) which drives the value of Cash Discount as:

(1)	$\begin{array}{l}\displaystyle \mbox{Discounted Cash Value} = \frac{ \mbox{True Cash Value} }{1+r}\end{array}$

The value of discount rate is set by the corporate investment policy but usually related to the market-determined Weighted Average Cost of Capital.

See also

Economics / Cash Discount

[ Weighted Average Cost of Capital (WACC) ]

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