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Forums › ACCA Forums › ACCA FM Financial Management Forums › Cost of capital as discount rate
May I know what is the reason to use cost of capital as discount rate?
Because we need to ensure that the returns from the project more then cover the cost of finance.
For a detailed explanation you need to watch the free lectures that go with chapters 17 and 18 of the free Lecture Notes. (You will understand that I cannot type out the whole of the lectures here 🙂 )
