Discount rate: related pages

The current value of a stream of future cash flows, negative or positive.

An alternative to NPV. Cash flows are discounted using the cost of equity (instead of the WACC) and a separate adjustment is made for financing (i.e, the tax savings.

DCF valuation

The calculation of the present value of a stream of future cash flows taking into account both risk and the time expected to elapse before the cash is received.

IRR

The discount rate at which the net present value is zero.

MIRR

MIRR is a variant of IRR which has several advantages including a single answer and a more sensible reinvestment assumption.

Terminal value

The value used for the cash flow in the last year of an NPV; the value of the investment at the end of the last period of the NPV.

Time value of money

The idea that money is worth more if received sooner rather than later.