Zero rate discount is the noun of the verb “to calculate” and refers to a financial technique used to determine the present value of a future cash flow when the interest rate is assumed to be zero (e.g., forecasting the worth of a given amount of money received in a year without any added interest.).
This concept is important in various financial applications, such as project evaluation, and has been used extensively since its introduction in the 1980s. It provides a simple approach to assessing the present value of future cash flows, ignoring potential variances due to fluctuating interest rates.