Discount rate/Definition: Difference between revisions
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imported>Nick Gardner (New page: The percentage by which the current value of an asset (to a person or to a commercial organisation) exceeds its value in a year's time. For a person, it is equal to that person’s...) |
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The percentage by which the current value of an asset (to a person or to a commercial organisation) exceeds its value in a year's time. For a person, it is equal to that person’s marginal rate of substitution between consumption in the two successive years. For a commercial organisation, it is equal to that organisation’s ''cost of capital'' | The percentage by which the current value of an asset (to a person or to a commercial organisation) exceeds its value in a year's time. For a person, it is equal to that person’s marginal rate of substitution between consumption in the two successive years. For a commercial organisation, it is equal to that organisation’s ''cost of capital''. | ||
Revision as of 09:22, 11 March 2008
The percentage by which the current value of an asset (to a person or to a commercial organisation) exceeds its value in a year's time. For a person, it is equal to that person’s marginal rate of substitution between consumption in the two successive years. For a commercial organisation, it is equal to that organisation’s cost of capital.