- The hurdle rate of interest or cost of capital rate applied to the discount factors used in a discounted cash flow appraisal calculation. The discount rate may be based on the cost-of-capital rate adjusted by a risk factor based on the risk characteristics of the proposed investment in order to create a hurdle rate that the project must earn before being worthy of consideration. Alternatively, the discount rate may be the interest rate that the funds used for the project could earn elsewhere.
Accounting dictionary. 2014.
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discount rate — n 1: the interest on an annual basis deducted in advance on a loan 2: the interest levied by the Federal Reserve for advances and rediscounts Merriam Webster’s Dictionary of Law. Merriam Webster. 1996 … Law dictionary
discount rate — n. 1. DISCOUNT (n. 3) 2. the rate at which the Federal Reserve Banks discount or rediscount securities offered by member banks … English World dictionary
discount rate — discount .rate n [C usually singular] the interest rate that a country s ↑central bank charges to other banks … Dictionary of contemporary English
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discount rate — 1) The hurdle rate of interest or cost of capital rate applied to the discount factors used in a discounted cash flow appraisal calculation. The discount rate may be based on the cost of capital rate adjusted by a risk factor based on the risk… … Big dictionary of business and management