What does Discount Rate mean? Read on to discover the definition & meaning of the term Discount Rate - to help you better understand the language used in insurance policies.

Discount Rate

The rate of interest at which a firm could earn income given a variety of potential scenarios. For example, in comparing disparate cash flow loss funding plans, comparing the net costs of each on a net present value basis allows the plans to be evaluated on a standard basis, using the firm's discount rate.

We hope the you have a better understanding of the meaning of Discount Rate.

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