Abstract
The discount rate, or MARR,1 imposes a condition of minimum profitability which a project or project increment must meet to qualify for acceptance. Because it affects whether a project will be accepted or rejected and how much will be spent on it, the value of the discount rate is a key ingredient in an economic evaluation. If it is set too high, some projects which are economic will be rejected; if too low, some projects which are uneconomic will be accepted.
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Ruegg, R.T., Marshall, H.E. (1990). Selecting a Discount Rate or MARR. In: Building Economics: Theory and Practice. Springer, Boston, MA. https://doi.org/10.1007/978-1-4757-4688-4_11
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DOI: https://doi.org/10.1007/978-1-4757-4688-4_11
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