The term ‘discounts’ is a broad and varied meaning word when it comes to use in business. It literally has four distinct definitions. Each definition is used within a certain context of business. The first and most dollar expensive use is with original issue discount related to bonds in the market. The second use and most common is as an incentive in business.
Internal Rate of Return
The internal rate of return is a financial measurement tool used to evaluate and compare projects with similar investment, time duration, and risks. The tool identifies the discount rate on the investment given the initial outflow and cash and the associated inflows over the lifetime of the project. The tool is more effective for significantly large investments and for investments lasting less than 10 years.
I love the game of Monopoly. My sons enjoy playing it too. But we all have the same complaint about the game; it takes forever to accumulate all the wealth and ultimately win the game. Being a landlord means the same thing. It will take a long time to accumulate wealth. For those of you considering becoming a landlord, there are certain business dynamics and economics you should understand.