The discount factor of a company is the rate of return that a capital expenditure project must meet to be accepted. It is used to calculate the net present value of future cash flows from a project ...

Discounting a future cash flow expresses future returns in today's dollars. This allows a fair comparison between initial business expenses and your expected or realized returns. As an example, you ...

When you apply for a mortgage, your lender will probably quote you an interest rate -- say, 4.5%. The problem with the interest rate is that is doesn't usually reflect the true cost of borrowing money ...

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Q. I have prepared projections for a proposed project, and I want to calculate the internal rate of return. Instead of using Excel’s IRR function, should I use simple math formulas so others can ...

The Gordon model allows for the fact that the market might put a price on a stock that's different from what you might estimate using the equation above. A higher stock price than predicted implies a ...