You said in the beginning that the for the discount rate one commonly uses the WACC. Where in the WACC the cost of equity -so for example a payout to shareholders- is already included. So is it a fair general assumption, that a NPV above zero is the value of the investment above the assumed return? (E.g. WACC)
Great video. Would be good to know in plain English what the discount rate is. Is it supposed to be equal to the expected interest rate based on inflation or how do you assume the discount rate?
Cost of capital, when you borrow there is interest rate, is the cost of capital worth the investment? NPV can answer that. Also discount rate can be another investment which gives a certain return, is the project you plan to do gives better outcome than the other project? NPV can answer that.
