TABLE OF CONTENTS Preface ix Acknowledgment xiii Part 1: Financial Analysis and Choice of Alternatives 1. Introduction 3 Costs and Benefits 4 Importance of Time (Time Value of Money) 5 Interest Rate 6 Continuous Compounding of Interest 7 Effective Rate of Interest 7 Nominal Interest Rate 8 Equivalence 9 Cash Flow Diagram 10 Inclusion of Nonmonetary Costs and Benefits 13 Importance of Cash Flow Diagram 13 The Process of Decision Making 15 Financial Analysis Methods 16 Derivation of the Formulae 16
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