For all of the problems involving the time value of money, there is a need for an interest rate to apply. This rate is referred to by different names like the cost of capital, hurdle rate, required rate, etc. While the details of the calculation of this rate is an important topic in a finance class and beyond this class - the basic idea of how a company would come up with the rate is something you can find with a little research. So your original post is what you find about how to determine the interest rate to use - please explain in your own words and not with a large cut and paste.