I think D is the right choice. All the new assets will lose value over time, so it's important to factor in inflation. This is a 'priceless' piece of information for the project.
Option B makes more sense to me. The Economic Appraisal should account for the cost of inflation, not the Financial Appraisal. I hope the exam question isn't too 'inflated'!
Option C is the correct answer. The Financial Appraisal should include the cost of inflation over the life of the scheme to accurately estimate the ongoing costs.
Option C is the correct answer. The Financial Appraisal should include the cost of inflation over the life of the scheme to accurately estimate the ongoing costs.
Zoila
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