How Does Inflation Affect the Evaluation of Engineering Projects

question 13

Essay

How does inflation affect the evaluation of engineering projects?

---

Definitions:

Invest

The action of allocating resources, usually financial, into something with the expectation of generating income or profit.

Money Supply

The total amount of money available in an economy at a particular time, including cash and bank deposits.

Well-reasoned Decisions

Choices or conclusions derived from careful thought, analysis, and evaluation of relevant information.

Rational Expectations

The hypothesis that people form forecasts about the future based on all available information in an unbiased manner and learn from past mistakes.