# Capital Costs

If you were offered $1,000 today or the same amount in ten years’ time, which would you take? Most of us would realise that, because of inflation, the value of the money would decrease over the period so that the$ 1,000 would not buy as much in ten years’ time as it does today. Seen from another perspective, if you take the money today, you can put it in the bank and earn interest, so that the actual amount increases over the period. This simple example illustrates the need for us to treat for capital and operating expenditure differently, and this forms the content of this unit.