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An attempt to define the discount rate in the light of the type of investment project

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  • Foltyn-Zarychta, Monika

Abstract

The problem of estimating the discount rate level is a crucial issue in investment project appraisal procedure. The discount rate is strongly determined by the type of investment that sets the scope of decision criteria. The need to apply financial efficiency, economic efficiency or justice criterion impose the frames for theoretically correct measure of the discount rate.

Suggested Citation

  • Foltyn-Zarychta, Monika, 2010. "An attempt to define the discount rate in the light of the type of investment project," MPRA Paper 40188, University Library of Munich, Germany, revised 2010.
    • Handle: RePEc:pra:mprapa:40188
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    References listed on IDEAS

    as
    1. Oecd, 2007. "Use of Discount Rates in the Estimation of the Costs of Inaction with Respect to Selected Environmental Concerns," OECD Papers, OECD Publishing, vol. 7(9), pages 1-42.
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    More about this item

    Keywords

    discount rate; investment appraisal;

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate

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