How do I calculate NPV with The social marginal rate of time preference and no inflation?
Hi,
I need to calculate the NPV of a project where The social marginal rate of time preference is assumed to be 5 per cent in real terms.
The initial investment is 1,000 $, and the investment will insure a stream of benefits from time period one to infinity – where the annual benefit will be 60 $.
Can anyone help how to figure this out? And maybe give another example where inflation is taken into account as well?
Thank you in advance!
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