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<p>[quote user="Wizlish"]</p> <p> </p> <div class="quote-header"> </div> <blockquote class="quote"> <div class="quote-user">Sam1</div> <div class="quote-content">The benchmark hurdle (interest) rate for a federally funded project, i.e. highways, waterways, etc., is the 10 Year Treasury Note or the Treasury's weighted average cost (interest) for marketable debt. The benchmark hurdle rate for a private business is its weighted average cost of capital... <p>No one said that talking about interest rates is jargon.</p> </div> </blockquote> <div class="quote-footer">But it becomes so when you use terms like 'hurdle rate' (assuming you intended MARR) out of context, and combine 'benchmark hurdle rate' as if it were a term itself (you used it twice without definition other than 'interest rate', which it only resembles nominally.</div> <p>If you're going to criticize working engineers for using terms that some of us on the forums will look up ourselves if we find them confusing, you must not turn around and do worse in your own specialty.  Especially when you then paraphrase them improperly in terms of what was intended.</p> <p>Not that we can't disentangle the meaning with a little reading.  I myself tend to use technical terms or expressions with the understanding that if anyone doesn't understand them, they should ask.  My father jokes about translating some of his explanations into English as necessary.  But I think there is a line between using jargon in context and using it to 'show off' or impress folks with what you know.  I don't think Mr. Payne crossed that line badly enough for you to have assailed him as you have. [/quote]</p> <p>Actually, had you paid careful attention, you would have noticed that I am not the only one who referred to Mr. Payne's use of jargon, i.e. disutility of time.  He could have said that time may or not be important for people when they are selecting a transport option, i.e. rail vs. driving, rail vs. air, driving vs. air, etc. </p> <p>I have challenged Payne's use of some terms.  Moreover, I don't believe that many of his analysis would stand up under close scrunity, i.e. he frequently relies on data that is old or speculates about Amtrak's accouting issues, as an example, i.e. avoidable costs, when he does not have access to the company's books. </p> <p>In simple terms the hurdle rate for a net present value calculation is the same as an interest rate.  I tried to make that clear by placing "interest" in parathensis right behind the term hurdle rate.  The hurdle rate can be more complex than a simple interest rate.</p> <p>I was responding to Mr. Payne's use of the AAA bond rate for discounting purposes, and I did not want to get overly involved in a discussion of hurdle rates. </p> <p>If one does not understand interest rates as the fundatmental basis for runing a present value calculation, there is no basis for discussion. </p>
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