A positive number (usually denoted as

$\begin{array}{l}r\end{array}$ ) which drives the value of Cash Discount over accounting period (usually 1 year) 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 and usually at higher rate than Weighted Average Cost of Capital with typical market inputs.

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See also