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<p>The government uses a discount rate to evaluate capital projects known as the Social
Time Preference Rate. This rate is used to convert costs and benefits that occur at
different points in the future to ‘present values’ thereby allowing comparison.</p><p>
</p><p>This rate is currently 3.5% and tapers depending on the life of the appraisal
period, as set out below.</p><p> </p><table><tbody><tr><td><p>Period of years</p></td><td><p>0–30</p></td><td><p>31–75</p></td><td><p>76–125</p></td><td><p>126–200</p></td><td><p>201–300</p></td><td><p>301+</p></td></tr><tr><td><p>Discount
rate</p></td><td><p>3.5%</p></td><td><p>3.0%</p></td><td><p>2.5%</p></td><td><p>2.0%</p></td><td><p>1.5%</p></td><td><p>1.0%</p></td></tr></tbody></table><p>
</p><p>These rates are set by HM Treasury through the Green Book, which is publically
available central government best-practice guidance on appraisal and evaluation. The
rate was last changed in 2003.</p>
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