For the purpose of cost–benefit analysis inflation can be consistently handled in either of two ways. First, when calculating the present value of expected net benefits, prices and interest rates can be calculated in real terms. That is, no inflationary components are included in either the prices or the interest rates. The second approach includes inflation in both the price and the interest rate calculations; calculations are made in nominal terms. As detailed below, both approaches are equivalent as long as both prices and interest rates are projected in real terms, or both projected in nominal terms.