Time value of money and return language

A dollar later is worth less than a dollar now — that single idea powers every CRE metric. Present value discounts future cash flows at a rate reflecting risk and alternatives; future value compounds forward. The discount rate IS the risk dial: raise it and distant dollars matter less.

Return language you will meet daily: cash-on-cash (year-one cash flow ÷ equity — simple, ignores time), IRR (the discount rate making NPV zero — time-aware, assumes reinvestment), equity multiple (total cash back ÷ cash in — scale-aware, time-blind). None is "best"; together they triangulate a deal. An 8% cash-on-cash with no growth and a 1.6x multiple over 7 years tell different stories about the same building.

Rule-of-thumb fluency helps: at r%, money doubles in about 72/r years. At 7.2%, ten years doubles. That instinct catches spreadsheet errors before they cost money.