Exogenous and endogenous discount rates for projects of enterprises from the mineral resources industries

Mineral resources industries play a huge role in the development of Russian economy. Therefore, investment projects increasing the efficiency of enterprises in these industries are worthy of particular attention. However, specialists often underestimate the importance of discount rate, which impedes objective investment calculations. The study aims to identify the specifics of calculating the discount rate for assessing the efficiency of investment projects of enterprises operating in mineral resources industries and to create the calculation methods. The propositions of the neoclassical theory of investment constitute the methodological basis of the study. In the course of the desk research, the methods of analysis, synthesis, induction are used. The evidence is the data on the profitability of the enterprises in Russia’s mineral resources industries for 2012–2022. The authors offer an original definition to the concept of discount rate, which ensures the objectivity of its calculation. The definition characterises it as a barrier interest rate that reflects a dynamic nature of the process of earning returns on investment and satisfies the conditions of a minimum rate of return, absence of its direct relation to the return on assessed asset or investments, presence of alternative investment options, and investor’s typical motivation with regard to receiving returns. The authors elaborate on the provided definition further by specifying the peculiarities of the mineral resources industries from the standpoint of specifics of assessing the investment projects’ efficiency. In addition, they propose the concepts of exogenous discount rate and endogenous discount rate, which are distinguished by the orientation of projects either to external or internal environment of an enterprise, and construct the corresponding calculation methods within the framework of subsoil users’ projects. The scientific value of the research lies in extending theoretical knowledge in the field of investment valuation and obtaining methodological tools that allow for more accurate calculations of efficiency of the projects implemented in the subsoil use sector.