Answer:
The statement is incorrect. All of the options listed are actually main considerations used in determining the interest rate used in evaluating public projects. Let me explain each one.
Step-by-step explanation:
A. The general inflation rate experienced by the public who are beneficiaries of the project is an important consideration because it affects the real value of the benefits that the project will provide over time. If inflation is high, the benefits of the project may be eroded by rising prices, which means that a higher interest rate may be required to compensate for this risk.
B. The opportunity cost of capital to the government agency responsible for the project is also an important consideration. This refers to the returns that the agency could earn by investing its funds in other projects or investments. If the opportunity cost of capital is high, the interest rate required for the project may also be high.
C. The opportunity cost of capital to the taxpayers who are beneficiaries of the project is also important because it reflects the returns that taxpayers could earn if they invested their money elsewhere. If the opportunity cost of capital is high, taxpayers may demand a higher rate of return on their investment in the project.
D. The interest rate paid on issued bonds that finance the project is also an important consideration. If the interest rate on the bonds is high, the cost of financing the project will be high, which means that a higher rate of return will be required to justify the investment.
Therefore, all of the options listed are main considerations used in determining the interest rate used in evaluating public projects.