INVESTMENT OPPORTUNITY PRINCIPLES

of the whole series of differences between the two incomestreams (some differences being positive and others nega-tive) will make the total zero.

If the rate, so computed, were taken for every possiblepair of income streams compared as to their advantagesand disadvantages, it would authentically decide in each

CHART 17

Difference Between the Best and the Next Best Investment OpportunityIn the Raising of a Crop.

case which of the pair is to be preferred. That one whichcompared with the other shows a rate of return on sacri-fice greater than the rate of interest would be preferredand the other rejected. By such preferences and rejectionsthe individual would be led to a final margin of choice ofthe best option. This contrasted with its nearest rival

CHART 18

Difference Between the Best and the Next Best Investment Opportunityin the Draining and Cultivating of Swamp Land.

would show a marginal rate of return over cost equal tothe market rate of interest.

The problems of choosing when to cut a forest, of whatlength to make a production period, how far to push anyindustrial policy, to what degree of intensiveness to cul-tivate land, are all the same problem of choosing thebest out of innumerable possible income streams, i.e.,

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