Why Are the Capital Costs of Long-Term Projects Discounted to Present

Multiple Choice

Why are the capital costs of long-term projects discounted to present value?

A) Because money that is received in the future has a greater value than money received now.
B) To better account for the resource yield that will be foregone by a long-term investment.
C) Because the amount of money that is spent in interest payments for the project should not be incorporated into the capital budget.
D) To better account for the relative stability of tax-free government investments as compared to private sector projects.