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hurdle rate

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cost of capital

Overview page. Subjects: Economics.

The rate of return an enterprise has to offer to induce investors to provide it with capital. The cost of loan capital is the rate of interest that has to be paid. The cost of equity...

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discount factor

Overview page. Subjects: Financial Institutions and Services — Accounting.

The present value of a future cash flow of one unit. The formula is:

where r is the rate of interest per period and t the number of time periods. ...

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discount rate

Overview page. Subjects: Economics.

The interest rate at which future receipts or payments are discounted to find their present value. If the discount rate is 100r percent per annum, the present discounted value of a payment...

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discounted cash flow

Overview page. Subjects: Economics.

The method of calculating the net present value of a project by adding the present discounted values of all net cash flows at various future dates. If the net receipts (income less cost) at...

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present value

Overview page. Subjects: Economics.

The result arrived at in a discounted cash flow calculation by multiplying a projected annual cash flow figure by a discount factor derived from a hurdle rate of interest and a time period.

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See overview in Oxford Index