3 ms·
You have the right idea, but you got the formula wrong. That's evidenced in the source you link, but you can also reason it from first principles: a higher disc
by Denvercoder9 3y ago
You have the right idea, but you got the formula wrong. That's evidenced in the source you link, but you can also reason it from first principles: a higher discount rate should make the cash stream less valuable, not more. The correct formula is n / d.
- Stasis5001 3y agoOops, that's what I get for mathing before coffee-- mixed up the formula for \sum (1+r)^n vs. \sum r^n