3 ms·
Doesn't time value of money decrease this effect? Assuming a fixed revenue over time, future revenue is much less relevant, so is its loss.
by jhgb 4y ago
Doesn't time value of money decrease this effect? Assuming a fixed revenue over time, future revenue is much less relevant, so is its loss.
- nonameiguess 4y agoThat's what the 4% is. A perpetuity that pays out $6000 a year is valued at $150,000 assuming a 4% discount rate. Without a discount rate, the value of any perpetuity would be infinity.