I have increased the discount rate, and future revenues disappeared. Where did they go?

Created by Steve Hoover, Modified on Sun, Jan 14 at 11:24 AM by Steve Hoover

Future revenues did not go anywhere. Revenue predictions are the same, regardless of the discount rate applied.


A higher discount rate, however, implies that future revenues are more heavily discounted. In other words, the model will predict the same cash flows, but these cash flows predicted in the future will be worth less to you today with a high discount rate than with a small one.

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