VOX Reports: This means that more projects with big current costs and small future benefits will pass the NPV (Net Present Value) test. For example, the investment below returns more than its assumed cost of capital after 12 periods under the Biden Administration's 1.7%, but not under the Trump Administration's 3%.
BOTTOM LINE: Expect:
- more government spending ("investment") under a Biden Administration; and
- less government spending in a Trump one.
NOTE: Vanderbilt uses a 12% Discount rate to evaluate potential projects.
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