I need to respond to my professor question about my discussion post

This is my post

An investment has cash flows throughout its useful life. A dollar of cash flows in the early years of an investment is worth more than a dollar of cash flow in later years. A simple addition or subtraction of money received or paid at different points in time to arrive at the total effect of an investment ignores the time value of money, an important consideration in all investments. The present value explicitly considers the time value of money in evaluating capital investments. The present value method uses a specified discount rate to bring all subsequent net cash inflows after their initial investment to their present values. The present value rule is to accept the project if the net present value is zero or positive. Reject the project if the net present value is negative.

WC: 135

This is my professors question

Good point here:

The present value method uses a specified discount rate to bring all subsequent net cash inflows after their initial investment to their present values. The present value rule is to accept the project if the net present value is zero or positive. Reject the project if the net present value is negative.

How is the discount rate determined? Why?