TM 5-822-11/AFP 88-6, Chap. 7
before alternative 1, which has the least present
worth, is selected, other considerations must be
made. The considerations are called decision fac-
tors and they include:
(1) How certain are the prices that have
been selected for future years (inflation)?
(2) How certain are the life expectancies
that have been assigned for the various
alternatives?
(3) If the higher initial cost alternative had
the lowest present worth, is funding available now
to perform the alternative with the highest initial
cost?
(4) What is the influence of each alternative
on mission operations?
d. Inflation. When inflation is included in the
analysis, it can drastically alter the selection
process. The inflation rate must apply to the
materials and procedures being investigated. It
c. Comparison. The seal with the lowest initial
must not be a general economy inflation factor.
cost was the least expensive alternative over the
Instead, each present worth calculation must be
life of the pavement for this example; however,
multiplied by an inflation factor:
(a) PW = .00 + 0.607 =.607 per ft
(4) The use of inflation favors the higher initial cost that usually has a lower cost over the period being
inflated, which in this case would be alternative 2. Again, the decision factors must be considered before
selecting the more preferred alternative for a given situation.
D-2
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