ABSTRACT
Inflation is a fact of life. It denotes a general increase in the prices of goods and services. Inflation is expressed as the rate of increase in the prices. The rate is measured by considering the prices of a “basket” of consumer goods and services. The inflation rate in a country is the result of a complex interaction among several variables, such as money supply, government policies, currency exchange rates, quality of infrastructure, and the level of political stability. A number of organizations deal with public projects, such as school districts, charity hospitals, and the International Red Cross. While sophisticated software with advanced graphics capabilities are available for analyzing large engineering projects, spreadsheet analysis is usually sufficient for most needs. Inflation consideration can become pertinent in projects of long useful lives, especially if the inflation rate is high. Government projects have their own special features that must be considered in benefit-cost ratio analyses.
