4 ms·
Yeah I just picked a number out of thin air. I suppose it depends on your discount rate + some arbitrary threshold of when you want to say the asset has returne
by nateberkopec 6y ago
Yeah I just picked a number out of thin air. I suppose it depends on your discount rate + some arbitrary threshold of when you want to say the asset has returned most of it's useful cash flow.
For example, a cash flow with a 10% discount rate will return about 90% of all it's discounted future cash flow by year 20.
The discount rate depends on the investor, and as for when you stop counting cash flow on the way to infinity, I guess that's up to you.