What ia discount rate?

Discount rate refers to the The rate of interest charged by a [CENTRAL BANK] when lending to other financial institutions. It also refers to a rate of interest used when calculating discounted cash flow. The discount rate is the interest rate used to determine the present value of future cash flows in a discounted cash flow (DCF) analysis. This helps determine if the future cash flows from a project or investment will be worth more than the capital outlay needed to fund the project or investment in the present.