human
Why is the discount rate used in the discounted cash flow model?
assistant
The discount rate is used to reflect the time value of money. The discount rate is the interest rate that investors would require to make a project worth doing. For example, if you were to invest $1,000 in a project that would return $1,000 in 10 years, you would need to be paid an interest rate of 10% to make the project worthwhile.