You are viewing a single comment's thread from:

RE: Understanding the Time Value of Money

in Economics2 years ago

Time value of money was an important aspect of my job when I worked in the Cost Benefit Analysis (CBA) Team for the Queensland Government. We typically used discount rates of 4% and 7%. It made quite a difference as project had evaluation periods as long as 30 years. These rates were determined on a national level so we had no say in determining them. I think it makes sense to have more than one discount rate for the purpose of sensitive testing results.

Sort:  

Yes, Time value of money is really important. Particularly when initiated new project. But we use discount rate more than 7% in calculation. Thanks for your comments.