Evaluating Projects with the Benefit - Cost Ratio Method - Interest rate public projects
6 important questions on Evaluating Projects with the Benefit - Cost Ratio Method - Interest rate public projects
- What is the goal of projects in the public sector?
- Based on the above how is the interest rate determined?
The choice of interest rate in the public sector is intended to determine how available funds should best be allocated among competing projects to achieve social goals.
What are the [3] main considerations in choosing the interest rate to use in public sector projects?
- The interest rate on borrowed capital;
- The opportunity cost of capital to the governmental agency;
- Opportunity cost of capital to the tax payers;
What is meant with the consideration: the interest rate on borrowed capital?
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What is meant with the consideration: the opportunity cost of capital to the governmental agency?
What is meant with the consideration: The opportunity cost of capital to the taxpayers?
What is an additional theory used on establishing interest rates for federal projects?
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- Never study anything twice again
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