Table 3: Differences in financing assumptions.

Engineering analysis Economic analysis

Land paid with equityLand included in capital investment and cost is divided between financing and equity
Tax benefits or losses carry overTax benefits or losses occur in the year they occur
Interest is paid with equity during constructionInterest is compounded annually during construction (interest is capitalized)
Loan and interest are not included in computing taxesLoan interest is deductible for purposes of tax calculations
Inflation is assumed to be zeroInflation is assumed to be 2.5%