Inflation And Cost-Benefit Analysis
One of the most frequent errors made in the preparation of investment project evaluations arises out of the improper accounting for the impact of inflation on the financial and economic performance of a potential project. In this case of commercial projects it is not uncommon to find the returns to the owner of the project (either private sector, government, or public enterprise) underestimated or overestimated by 50 percent or more simply as a result of the use of incorrect procedures in accounting for expected inflation. Similarly, in economic appraisals of projects, economists usually have ignored the financing and liquidity constraints which inflation imposes on the investment and operation of projects even when the realized rate of inflation is equal to the rate anticipated.
|Date of creation:||Sep 1978|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (613) 533-2250
Fax: (613) 533-6668
Web page: http://www.econ.queensu.ca/Email:
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:qed:dpaper:333. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bahman Kashi)
If references are entirely missing, you can add them using this form.