Quote:
Originally posted by rastakit
You must have take Marketing classes in your second year...the 8% is a discount rate...he's not "earning" it...you use it to bring back cash flows into today's dollars...it's a proxy for inflation...get with the program...a string of payments of 27000 per year for 40 years is not worth less than one annual payment...
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the discount rate in this case is the same as the earnings. there is no info about inflation.
and as I explaind before the calculation were for 40 month and 18 month on an 8% per month that's why it is coming to about 20k and not 300k