To properly evaluate the purchase of a long-term asset, the expected future cash flows must be adjusted for

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To properly evaluate the purchase of a long-term asset, the expected future cash flows must be adjusted for the time value of money. This is done through techniques such as net present value analysis or discounted cash flow analysis, which take into account the fact that money today is worth more than money in the future due to inflation and other economic factors. While property taxes, interest, and future revenues may also be important considerations in evaluating the purchase of a long-term asset, they do not necessarily need to be adjusted for in order to properly analyze the investment.

To Properly Evaluate the Purchase of a Long-Term Asset, the Expected