74 Appendix 3: Frequently asked questions (FAQs) Appendices future (in most people’s opinion). Because the dollar today is worth more than a dollar in 30 years, the dollar 30 years from now needs to be adjusted to express its worth today. Adjusting the values for this “time value of money” is called discounting and the result of adding them all up after discounting each value is called net present value. Internal rate of return (IRR): How do I communicate this in laymen’s terms? Using the bank as an example, an individual needs to decide between spending all of their paycheck today and putting it into savings. If they spend it today, they know what it is worth: $1 = $1. If they put it into savings, they need to know that there will be some sort of return to them for spending those dollars in the future rather than now. This is why banks offer interest rates and deposit interest earnings. This makes it so an individual can expect, for example, a 3% return in the future for money that they put into savings now. Total economic impact: How do I communicate this in laymen’s terms? Big numbers are great but putting them into perspective can be a challenge. To add perspective, find an industry with roughly the same “% of GRP” as your college (Table 1.3). This percentage represents its portion of the total gross regional product in the county (similar to the nationally recognized gross domestic product but at a county level). This allows the college to say that their single brick and mortar campus does just as much for Westchester County as the entire Utilities industry, for example. This powerful statement can help put the large total impact number into perspective.
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