Selecting an Innovation Project on an Uncertain Discount Rate Basis

The graphical method presented herein allows solving the problem of selecting an innovation project under discount rate uncertainty. The principle of the method consists in plotting NPV graphs of two projects under review on the interval of discount rates, where NPV of at least one project is positive, and calculating the two obtained areas between the intersecting graphs. The presented method enables to expressly find out which of the projects is most attractive, i.e. to solve the known problem of inconsistent assessments of the traditional project selection criteria, such as NPV, PI, PP, IRR and MIRR