Rather than using the rate of inflation to calculate I suggest using the rate of return on capital. Let's say that for 5 years, AA was able to return 50% on it

Rather than using the rate of inflation to calculate I suggest using the rate of return on capital. Let's say that for 5 years, AA was able to return 50% on its capital (massive growth in the sector), after that it is the rate of inflation. In that case the benefit for the passes to AA in todays dollars's (assuming 3.25% inflation): (350000 x 1.5^5) x 1.0325^25 = $5912563.906. We use the rate of company's return on capital rather than inflation. Here's why: Imagine you own a stock trading company that can double the money risk-free in its bank account every 12 months. Wouldn't it make sense to borrow money as long as the interest rate was < 100%, because the benefit of those funds would be 100% - the rate of return on capital of your company?