In an annual discounted cash flow analysis, the sum of all future cash flows (C) over some holding period (N), is discounted back to the present using a rate of return (r). This rate of return (r) in the below formula is the discount rate.
The annual discount rate is the rate of return used in a discounted cash flow analysis to determine the present value of future cash flows.
In an annual discounted cash flow analysis, the sum of all future cash flows (C) over some holding period (N), is discounted back to the present using a rate of return (r). This rate of return (r) in the below formula is the discount rate.
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