“Modified” rates of return for capital investment evaluation and the issue of the type of rate base to be used there are reviewed, and it is shown that the base type recently proposed by Beaves is actually identical to one previously proposed by Lin. In any event, under certainty and a perfect capital market, it is shown that the rate base issue is irrelevant in that project selection by optimal rate of return decision rules is, inevitably, independent of the base type used. Also discussed are some potential misapplications of “modified” rates and correct means for avoiding those.