For investment decisions in public companies an acceptable approach
to the evaluation of capital projects under infiation may be to discount
the money fiows to be derived from the equity portion of a project by
the equity cost of capital (expressed in money terms, as is usual) because
this procedure will generate for shareholders an increase in the net
terminal value, in money terms, of their investment in the company and,
hopefully, this will be refiected in the share price so that it represents an