What is SIAI’s discount rate? If I offered you $100 today in return for r*$100 in a year’s time, for what r are you indifferent? Are you borrowing money, saving it, or neither?
EDIT: For context, I seem to recall Vassar once suggesting 40%.
I don’t think you’re putting the r in the right place. If their discount rate is 40%, you should be comparing $100 now with $250 next year, or $40 now with $100 next year.
What is SIAI’s discount rate? If I offered you $100 today in return for r*$100 in a year’s time, for what r are you indifferent? Are you borrowing money, saving it, or neither?
EDIT: For context, I seem to recall Vassar once suggesting 40%.
I don’t think you’re putting the r in the right place. If their discount rate is 40%, you should be comparing $100 now with $250 next year, or $40 now with $100 next year.