The debate on the theory and practice of discounting and on discount-rate selection in defense decision making is an ongoing one, and diverse discounting theories have been endorsed by some practitioners and dismissed by others. Two important points about discounting emerge from analysis of these theories: 1. A specific discount rate is needed because decisions tend to be made in isolation. 2. Use of a positive discount rate does not imply that next year is less important than this year.An assessment of current discount theory and practice results in the suggestion that the choice not to discount is tantamount to utilizing a zero rate of discount. Several situations are offered as examples of those in which managers can take advantage of the time value of money made available through the practice of discounting.
My Research
