---
title: What should I use for a Discount Rate?
description: "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…"
url: "https://www.realdata.com/docs/what-should-i-use-for-a-discount-rate/"
updated: "2024-06-06"
category: General
---

# What should I use for a Discount Rate?

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](http://en.wikipedia.org/wiki/Cost_of_capital)