Your corporate Planning have decided to maintain the policy of applying a real terms discount rate of 15% pa to the latest development projects. Your parent company's weighted average cost of capital isforecast to be 6% pa after tax for the foreseeable future, and the purchasing power of the UK pound is predicted to decline steadily at the rate of 2% pa. Explain the discount rate you would recommend to use when evaluating the economical valuation of the potential projects considering the policy statement stated.