What should the discount rate be for evaluating a business project?
A business is considering a 0,000 project. The current annual rate of inflation is 4%. One option is to take out a loan for 8.5% for the investment. The current production rate of return is 9.5%. If the company was to invest the 0,000 instead of carrying out the project, the expected rate of return would be 9.25%. What should the discount rate be for evaluating this project option?
Posted on March 11, 2010 at 11:06 am by admin · Permalink
In: Coupon Q&A · Tagged with: annual rate of inflation, project option, rate of inflation, rate of return
In: Coupon Q&A · Tagged with: annual rate of inflation, project option, rate of inflation, rate of return
on March 11, 2010 at 11:06 am
Permalink
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