Discount rate determination for investment projects

Abstract

The objective of this work is to present a review and collection of the main theories for the choice of the discount rate for investment projects in the private and public domain. This rate represents an abstract concept which becomes many times in one of the most important facts to be determinate when we are analyzing the viability for an investment project. Therefore, we will see in first place an explanation about the concept, next we will revise the different methods and variables that are used besides comments of the different advantages and disadvantages that may arise. Finally, the obtained conclusions will be presented.