The discount rate refers to the interest rate used when calculating the net present value (NPV) of an investment. It represents the time value of money, which is the concept that a sum of money ...

The author and editors take ultimate responsibility for the content. Calculating the interest rate using the present value formula can, at first, seem impossible. However, with a little math and ...

However, NPV isn't useful when trying to decide which projects to take on as size or timeline aren't considered. The primary benefit of IRR is its simplicity: It's easy to calculate and easy to ...

Raiffa, Howard. "Methods of Calculating Net Present Value and Internal Rate of Return, Programmed Exercises." Harvard Business School Supplement 171-261, December 1970. (Revised May 1991.) ...