During the cost/benefit analysis, what must be done with expected future costs?

The correct approach during a cost/benefit analysis is to discount expected future costs to current monetary values. This method is essential because money today holds more value than the same amount of money in the future due to factors such as inflation and the potential earning capacity of that money. By discounting future costs, you are adjusting them to reflect their present value, which allows for a more accurate comparison with current costs and benefits.

This technique ensures that all costs and benefits are evaluated on a consistent basis, facilitating a clearer understanding of the financial implications of different options. Without this adjustment, future costs could appear disproportionately large or small compared to present values, leading to potentially flawed decision-making.

Other options may not provide a proper context for evaluating economic realities. Ignoring future costs or expressing them in past monetary values does not account for the time value of money, while simply aggregating them overlooks the necessity of adjusting for present value.