EVALUATION OF INVESTMENT MODELS BY APPLICATION OF DISCRETIONARY RATE - THE CASE OF RENEWABLE ENERGY IN TOURISM

Investments represent highly valuable economic substance. Being quite scarce, however, these resources must be allocated productively, which is in open market economies dominantly executed through market mechanisms and primarily through financial ones. Therefore, in the economic sense, great importance must be assigned to the discretionary discount rate as the possible driving force of the economic life. The authors indicate the problems of the discretionary discount rate as insufficiently elaborated and defined, and captured by the particularly imposed neo-liberal market concept. The directions of its development are presented by two different scenarios (projections). The main cost/benefit indicators have been applied to the work: intern rate of return, net present value, and benefit to cost ratio. Through the indicated scenarios, the need to apply lower discretionary discount rates in energy sector investments is shown, particularly in renewable energy sources and similar projects. According to the authors, such discretionary discount rate can represent both the laver and the strong weapon in obtaining the proclaimed goals of the economic policy. Another form of struggle against the imposed neo-liberal market concept is represented by respect and comprehension of the importance of the discretionary discount rate, in order for social costs not to exceed the benefits in the long run, which would ultimately lead to the non-efficient system.