On the demand form, what does the Discount Rate impact?

The Discount Rate represents the time value of money and is used to adjust future financial returns to their present-day value. Within the ServiceNow Demand Management application, the Discount Rate percentage entered on the demand form is a direct and required input for calculating the Net Present Value (NPV). The NPV formula discounts the planned future financial benefits and costs back to the present using this specific rate to help stakeholders assess the demand's profitability over time.

A. ROI: Return on Investment (ROI) is calculated as (Net Profit / Total Investment) 100. This formula does not use the discount rate.
C. Financial Benefit: The Financial Benefit is a user-entered value representing the total expected monetary gain; the discount rate is used to calculate its present value, not to determine the benefit amount itself.
D. Internal Rate of Return %: The Internal Rate of Return (IRR) is a calculated output that represents the discount rate at which the NPV equals zero. It is not influenced by the user-entered Discount Rate.

1. ServiceNow Product Documentation - Washington DC Release: Strategic Portfolio Management > Demand Management > Create a demand > Financials tab on the Demand form.

The documentation for the Net present value (NPV) field explicitly states: "Calculated present value of expected future cash flows minus the initial cost of the investment. The calculation uses the Discount rate (%) value."

The documentation for the Return on investment (ROI) field shows a calculation based on financial benefit and cost, with no mention of the discount rate.

The documentation for the Internal rate of return (IRR) field describes it as a calculated rate where NPV is zero, confirming it is an output, not an input-driven metric.