Residual Value of Infrastructures
Residual value (RV) is the value of the infrastructure at the end of the project lifetime, theoretically equal to the value that the asset will generate from then on.
The United Nation’s Sustainable Development Goals aim to integrate the three main dimensions of sustainable development: the economic, social, and environmental dimensions. The costs and benefits of most sustainable development projects must be evaluated. The proper treatment of the end of life (or residual value) of sustainable development investment projects aids in ensuring that the economic dimension is properly accounted for and gives a truer representation of the costs and benefits. Social discounting, or the selection of the discount rate, ensures that the social dimension is included when evaluating investment projects.
Cost-benefit analysis (CBA) is selected because it includes the three dimensions. CBA is the most widely used evaluation framework...
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