Thus the gain in spending money in Area X has to be tempered by the fact that the gain from spending the same money in Area Y has had to be forgone.

Paying for things in the future is less costly than paying for them now - a 1000$ in 2010 is worth less than 1000$ in 2001, having it now will cost you more. Your 1000$ invested today will be worth more than 1000$ in 10 years, so buying in 10 years time with today’s money will be cheaper. In general too Price increases or Inflation occur over time and 1000$ in 2000 will buy more than 1000$ in 2010. These two opposing factors can be considered in the Discount rate -1-5-10% per annum.

Assets are human-people with training and skills,

Non-human- stocks, equipment, buildings

.Some of these assets will deteriorate or wear out over time, they will need replacement and maintenance.