What should I use for a Discount Rate?

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The General Settings worksheet asks for a discount rate.

One way of looking at the Present Value rate for CLA would be to consider it the tenant’s cost of raising capital. If he generally borrows money via a line of credit, what is the percentage? If he uses his credit card, what might that cost him?

A business owner’s cost of capital will not be zero percent because capital has to come from somewhere. Even owner’s equity has a “cost.”

For more information on Cost of Capital, see: http://en.wikipedia.org/wiki/Cost_of_capital

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