In cost benefit analysis, the "discount rate" is:
A)the amount deducted from welfare recipients' payments for each dollar they have in earnings.
B)a reduction in the cost of doing evaluation research when several programs are evaluated at the same time.
C)that part of the costs of a program that is used for administrative purposes.
D)the amount future costs and benefits are reduced to account for inflation.

Question

Quizplus · Accepted Answer

The discount rate in cost benefit analysis is used to calculate the present value of future costs and benefits, accounting for the fact that money available in the future is worth less than the same amount available now, often due to inflation and the opportunity cost of not having the money available for other investments.

In Cost Benefit Analysis, the "Discount Rate" Is