Abstract
The present paper deals with the economic evaluation of long-range capital intensive public investment projects. A model is developed that enables the decision marker to envisage in graphical form the entire spectrum of possible outcomes, and to perform simultaneous sensitivity analysis of major economic and structural parameters. Economic feasibility regions, in terms of the project's IRBRs (Internal Rates of Benefit Return), replace the endless disputes about the ‘adequate’ discount rate, highlighting the impact of probable deviation from the expected capital cost and benefit stream. The model is applied to the Mediterranean–Dead Sea Project, one of Israel's largest and most controversial public investment plans.
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