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HomeMIT IDS.333 Risk and Decision Analysis, Fall 2021Unit 7: Drivers of Flexibility, Video 3: Discount rate and Learning Promote

Unit 7: Drivers of Flexibility, Video 3: Discount rate and Learning Promote

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Discount rate lowers present cost of later investments. This makes smaller, modular facilities cheaper than large initial investments. Learning from improved design and repetition similarly counteracts the value of economies of scale.