THE ROLE OF COST DISCOUNTING IN WEAPON SYSTEMS EVALUATION

THE THEORY OF DISCOUNTING IS A REASONABLY WELL DEVELOPED CONCEPT IN ECONOMIC THEORY THAT HAS FOUND PRACTICAL APPLICATION IN THE BUSINESS WORLD FOR OVER A DECADE. IN ADDITION, MANY PROJECTS UNDERTAKEN BY THE FEDERAL GOVERNMENT, SUCH AS LAND RECLAMATION HAVE CONSIDERED A RELATED ISSUE--THE COST OF FINANCING THE VENTURE. THE CONCEPTS OF DISCOUNTING, HOWEVER, ONLY RECENTLY HAS BEEN INTRODUCED INTO DEPARTMENT OF THE ARMY (DA) STUDIES. THE LITERATURE RELATING DISCOUNTING THEORY TO DEPARTMENT OF DEFENSE (DOD) PROGRAMS IS SOMEWHAT LIMITED. THEREFORE, THE THE PURPOSE OF THIS REPORT IS TO INVESTIGATE THE UTILITY OF DISCOUNTING IN SYSTEMS ANALYSIS STUDIES AND TO DEVELOP APPROPRIATE DISCOUNT RATES. THE REPORT BEGINS WITH THE THEORY OF DISCOUNTING, DESCRIBES THE USES OF DISCOUNT THEORY IN WEAPON SYSTEM ANALYSIS, AND INTRODUCES A METHOD FOR COMPUTING THE DISCOUNT RATE. IT IS INTENDED TO PROVIDE A A DISCUSSION OF THE THEORY OF DISCOUNTING FOR THOSE WHO MAY NOT BE FAMILIAR WITH THIS CONCEPT AND TO ELICIT CONSTRUCTIVE CRITICISM ON THE AMSAA APPROACH TO THE DEVELOPMENT OF APPROPRIATE RATES OF INTEREST. /AUTHOR/

  • Corporate Authors:

    Army Materiel Systems Analysis Agency

    Aberdeen Proving Ground
    Aberdeen, MD  United States 
  • Authors:
    • Baker, W
    • Williamson, R
  • Publication Date: 1969-3

Subject/Index Terms

Filing Info

  • Accession Number: 00201800
  • Record Type: Publication
  • Source Agency: Traffic Systems Reviews & Abstracts
  • Report/Paper Numbers: Tech Paper No 2
  • Files: TRIS
  • Created Date: Jul 6 1970 12:00AM