The social rate of discount must equal the opportunity cost of funds used to finance a project.

Question

Quizplus · Accepted Answer

The social rate of discount is the rate at which future benefits are discounted to a present value. It represents the opportunity cost of using resources for a project instead of investing them elsewhere. Therefore, the social rate of discount must be equal to the opportunity cost of funds used to finance a project.

The Social Rate of Discount Must Equal the Opportunity Cost