Q & A > Question Details
29/10/2020 A: Joel Kaye, Retired from UOP & Tesoro, kaye13@gmail.com
As Eric stated, the discount rate is often provided by the company based on cost of capital. I would place the typical range from 8% to 15%. If not provided 10% is a common rate to use, just clearly state you are reporting an NPV at given rate and duration. (e.g. NPV at 10% and 20 years).
13/10/2020 A: keith bowers, B and B Consulting, kebowers47@gmail.com
One should obtain the particular company capital investment evaluation criteria. Each processing plant will have different values depending on the cost of capital and interest rates, and competing investment alternatives There is not a single value or rule of thumb that can be used as 'correct.' Usually, economic evaluations are conducted with ranges of each variable in the evaluation, with results presented in multi-axis nomographs.
06/10/2020 A: Eric Vetters, ProCorr Consulting Services, ewvetters@yahoo.com
Normally each company has its own cost of capital numbers that they use for economic evaluations. I've seen numbers from 6-12%. It really depends on your own company though.