Abstract
Methods of evaluating the cost-effectiveness of innovative designs based on price comparison (reduced costs) and profits (pure discounted income) are analyzed. The deficiencies of the methods, resulting in incorrect evaluations, are pointed out. Specifically, identifying (incorrectly) the discount rate with the commercial interest on capital can result in delays in adopting innovative designs in nuclear power. Replacing the criterion of minimum costs (reduced costs) by the criterion of maximum profit (discounted income) can result in unfounded overstatement of the cost-effectiveness. It is proposed that a profitability index of discounted investments be used, for all of the indicated methods, to eliminate these drawbacks.
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