The Discount Rate

The discount rate, sometimes called an interest rate, but also called the cost of capital rate or fa future cash flows to account for the risk that those flows may not happen as planned or to create investment opportunity. ^ Discounting gives us a present-time feel for the value of future flows, opportunities into account.

Many things can be considered in determining the discount rate: real interest that could be earn< risk of inflation, the risk that the market will not be accepting of the project deliverables, the risk t capacity to pay in the future because of some mishap in the economy, the risk that the project w to exploit a market opportunity, or that the project will consume more capital than planned.

It is not uncommon for different discount rates to be applied to different projects in the same cor factors faced by each project. Ordinarily, to make discounting practical, all projects of similar typ factor, such as all pharmaceutical projects discounted at one rate and all real estate projects dis

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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