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<br />-5-: <br /> <br />LET filE READ ONE SHORT PARtlGRAPH FROf'l THE "PROPOSED <br />PRINCIPLES AND STANDARDS", WHICH GIVES RISE TO THIS ENTIRE <br />CONTROVERSY, IT SAYS THIS: <br /> <br />"THE DISCOUNT RATE WILL BE ESTABLISHED IN <br />ACCORDANCE WITH THE FOLLOWING CONCEPT: THE <br />OPPORTUNITY COST OF ALL FEDERAL INVESTMENT <br />ACTIVITIES, INCLUDING WATER RESOURCE PROJECTS, <br />IS RECOGNIZED TO BE THE REAL RATE OF RETURN ON <br />NON-FEDERAL INVESTMENTS. THE BEST APPROXIMATION <br />TO THE CONCEPTUALLY CORRECT RATE IS THE AVERAGE <br />RATE OF RETURN Oi~ PRIVATE INVESTMENT IN PHYSICAL <br />ASSETS, INCLUDING ALL SPECIFIC TAXES ON CAPITAL <br />OR THE EARNINGS OF CAPITAL AND EXCLUDING THE <br />RATE OF GENERAL INFLATION, WEIGHTED BY THE <br />PROPORTION OF PRIVATE INVESTillENT IN EACH riAJOR <br />SECTOR. " <br /> <br />* * * * * <br /> <br />"THE AVERAGE RATE OF RETURN ON NON-FEDERAL <br />INVESTMENTS IS ESTIMATED AT 10 PERCENT." <br /> <br />NOW, IN SH1PLE ~mRDS -- UNDERSTANDABLE TO THE LAYflWJ -- <br />JUST WHAT DOES THIS REALLY MEAN? THE KEY WORDS EXPRESSED ARE <br />"THE OPPORTUNITY COST OF * * * INVESTMENT", BUT THE NET RESULT <br />