Abstract
Financial calculation is an important part in the PPP project investment decision. In PPP practice, the selection of financial calculation indicators is quite arbitrary, which is prone to fairness imbalance between PPP projects to a certain extent and even affects project decision-making. Financial calculation indicators usually used in the PPP scheme design include financial internal rate of return, return on investment, reasonable profit rate, annual interest rate, etc. Based on the economic meanings of the four types of indicators and combined with specific cases, the study analyzes the quantitative relation and applicability between different indicators. When the PPP project involves as long a period as 20 to 30 years, it is recommended to use dynamic indicators (financial internal rate of return) rather than static indicators (return on investment, reasonable profit rate, annual interest rate) in the project investment decision. When dynamic indicators are selected, it is more suitable for the public sector to adopt the internal rate of return on investment without considering the financing cost and debt repayment. For private sector, the internal rate of return of the project capital reflects the profit after the financial leverage using equity fund, with more realistic reference significance.
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