Discounting an investment's cost and its market value is necessary to calculate net present value. Investment costs are the upfront expenses for planning, engineering, purchasing, building, and installing, excluding sunk costs.
Investment Costs are the actual expenses incurred on a Subject Well for drilling, completing, equipping (including but not limited to flow lines, tanks, and related equipment) to the point of product sales, and plugging and abandoning (if a Subject Well was a dry hole) as well as any other expenses that are classified as capital costs (and not expenses) under U.S. generally accepted accounting principles. Investment Costs are the expenses associated to the Project up to the date of the MOU's termination, including but not limited to construction costs, operation costs, development costs, and other expenses.
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