Greater influences and impacts of inflation

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Large projects, such as a new tunnel under the Hudson, the Big Dig in Boston, the Denver airport, a new military jet, and a natural gas pipeline from Alaska to the Midwest, often take 5 to 15 years from concept to completion.

(a) Should benefit and cost estimates be adjusted for the greater influences and impacts of inflation, government regulatory changes, and changing local economic environments? Why or why not?.

(b) How does the public budget-making process interact with the goal of accurate benefit and cost estimating for these large projects? Contributed by Morgan Henrie, University of Alaska Anchorage Cash Flow Diagrams

Reference no: EM131807823

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