rrt - the age, page-13

High hopes, thanks for the worked example.

My question is what happens if a company has a short life mine eg: needs to get its capital back in 5 years or 10 years. Applying a government bond rate return on the amount of capital invested without taking into account the life of the project does not work.

The government bond return assumes you get all the capital back at the end.

For an economic return, a company needs to get the capital it invested in a project back plus earn a return on that capital (eg the government bond rate).