Is there an intuitive explanation of why, in DCF modeling, the discount rate should be interpreted as the minimum rate of return?
This doesn't make sense to me because I think of the NPV as "what all the future cash flows should be, pulled to the present, if the universe evolves naturally". And if the universe just evolves, it has nothing to do with me, or what I want, or what I would accept minimally as the rate of return.
To me, intuitively, this rate should be the rate of inflation... Is my understanding of NPV incorrect? Please help me point out the flaw in my reasoning.