Economic evaluation overheads

Most economic studies of chemical processes show the projected performance of the process with respect to some parameter like return on investment, profit on sales, or net present value at some future year. These studies are appropriate for project evaluation by management, and may include cost components related to capital, energy, utilities, raw materials, labor, overhead, working capital, and so on. 

When evaluating the appropriateness of a contractor s fee, a client must know its costs for doing the project in-house. Then it must consider whether the expense of adding the contractor s overhead and profit to the cost of goods is more than the in-house costs. Finally, a client must justify the cost of any delays in reaching the market as being more economical than the contractor s fee. 

Moldnk, P. Gurecky, J. 2007. RC switch disconnectors and circuit-breakers in overhead MV systems - Evaluation of economic efficiency. Proc. of conference ELEKTRO, ZXJ Zilina, Slovakia. 

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