Which term describes the interest rate used in computing the present value of future cash flows?

Question

Quizplus · Accepted Answer

The discount rate is the interest rate used to determine the present value of future cash flows. It reflects the time value of money and accounts for factors such as inflation and the opportunity cost of investing in alternative investments. The applicable treasury rate relates specifically to government bond yields, and borrowing rate and income tax rate are not directly relevant to present value calculations.

Which Term Describes the Interest Rate Used in Computing the Present