The higher the opportunity cost or discount rate, the $$O$$ Higher the value of a projected reversion price $$O$$ More relevant the economic principle of time value of money (TVM) becomes $$O$$ Less relevant the economic principle of time value of money (TVM) becomes $$O$$ Less risk there is associated with obtaining an investor's required yield
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Opportunity cost is the value of the next best alternative that was not taken. In finance, the discount rate is used to calculate the present value of future cash flows. A higher discount rate implies a higher opportunity cost of capital. Show more…
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