If we were to select the appropriate discount rate for a project,this rate would reflect ________.

Question

Quizplus · Accepted Answer

The appropriate discount rate for a project should reflect the inflation rate for the currency picked for the project, as this represents the opportunity cost of investing in the project rather than in inflation-protected investments. Factors such as risk and default premiums may also be considered in determining the appropriate discount rate, but the inflation rate for the project currency is the primary consideration.

If We Were to Select the Appropriate Discount Rate for a Project,this