ABSTRACT
Wrestling with a big decision that will commit lots of resources over a multiyear period can be tough. The dollars committed today have a different value than the dollars of the future at a later point in the life of the venture under consideration. That needs to be considered. And critics will point out that the dollars committed today could have been used for some other purpose altogether. Would it have been smarter to apply resources to a different opportunity? The analysis of concerns like these has a language all its own—opportunity costs, present value, future value—and a set of formulas to help a manager or analyst sort things out.
