what is the appropriate discount rate to use for an investment or a business project while investing in standard assets like treasury bonds the risk free rate of return generally considered the interest rate on the three month treasury bill is often used as the discount rate 
on the other hand if a business is assessing the viability of a potential project the weighted average cost of capital wacc may be used as a discount rate this is the average cost the company pays for capital from borrowing or selling equity in either case the net present value of all cash flows should be positive if the investment or project is to get the green light types of discounted cash flowthere are different types of discount rates that apply to various investments of a business what type is required depends on the needs and demands of investors and the company itself here are the most common calculating the discount rateto calculate the discount rate use the following formula 