ABSTRACT
Under most circumstances, the determination of the appropriate discount rate to use in any given instance should not occupy an entire chapter in a book on water project financing. But the purpose of this book is to give the non-financial director or manager of a water or wastewater system the background he needs to understand what the system's bankers, investment bankers and financial advisors are telling him. In this regard, one of the most important lessons to be learned is that discounted numbers may not be what they seem. They can be manipulated to arrive at different conclusions. If this happens, the manipulation will occur in the selection of a discount rate. For that reason, the selection of the appropriate discount rate takes on a somewhat added significance.
