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Discount Rate—Explanation, Definition and Examples

Valutico

Internal Rate of Return (IRR): IRR represents the discount rate at which the net present value (NPV) of all cash flows from the investment becomes zero. In other words, it is the rate of return that makes the present value of future cash inflows equal to the present value of cash outflows.

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M&A Terms Every Business Owner Should Know

Class VI Partner

Discount Rate Discount Rate refers to the rate at which a stream of future cash flows is discounted to determine Net Present Value. The higher the degree of risk or unpredictability of a set of future cash flows, the higher the discount rate.