Costs appraisal methods

Expenditure on corrosion prevention is an investment and appropriate accountancy techniques should be used to assess the true cost of any scheme. The main methods used to appraise investment projects are payback, annual rate of return and discounted cash flow (DCF). The last mentioned is the most appropriate technique since it is based on the principle that money has a time value. This means that a given sum of money available now is worth more than an equivalent sum at some future data, the difference in value depending on the rate of interest earned (discount rate) and the time interval. A full description of DCF is beyond the scope of this section, but this method of accounting can make a periodic maintenance scheme more attractive than if the time value of money were not considered. The concept is illustrated in general terms by considering a sum of money P invested at an... 

There are two approaches to detection, the best being with a bolometer and the alternative being a semiconductor device. That there should be any contest at all between the two approaches for quantitative analytical spectrometry hinges only on practicality and cost. Lesurf gives an excellent appraisal of these methods and the text is recommended for supplementary reading. 

This method of investment appraisal recognises the time value of money (91p today will be worth 1 in a year s time if the rate of interest is 10%). Clearly, over the duration of a five-year project, the cost of capital, and... 

A leading method for evaluating regulations is cost-benefit analysis. A major feature of cost-benefit analysis is the desire to express the valuation of non-pecuniary benefits and costs such as time savings and deaths and injuries avoided in dollar terms. This permits a strictly numerical comparison of benefits and costs. Transportation has been at the forefront of the development and application of cost-benefit analysis, and the DOT has a tradition of appraising investments and proposed regulations using it (Viscusi, 1996). 

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