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Engineering economics depreciation

Depreciation. Depreciation arises from two causes deterioration and outdatedness (economically). These two causes do not necessarily operate at the same rate, and the one having the faster rate determines the economic life of the project. Depreciation is an expense, and there are several permissible ways of allocating it. For engineering purposes, depreciation is usually calculated by the straight-line method for the economic life of the project. Frequently, economic lives of 10 years or less are assumed for projects of less than 250,000. [Pg.346]

Because the engineer thinks of depreciation as a measure of the decrease in value of property with time, depreciation can immediately be considered from a cost viewpoint. For example, suppose a piece of equipment had been put into use 10 years ago at a total cost of 31,000. The equipment is now worn out and is worth only 1000 as scrap material. The decrease in value during the lo-year period is 30,000 however, the engineer recognizes that this 30,000 is in reality a cost incurred for the use of the equipment. This depreciation cost was spread over a period of 10 years, and sound economic procedure would require part of this cost to be charged during each of the years. The application... [Pg.267]

Because of its simplicity, the straight-line method is widely used for determining depreciation costs. In general, design engineers report economic evaluations on the basis of straight-line depreciation unless there is some specific reason for using one of the other methods. [Pg.279]

The profits generated by most chemical plants are subject to taxation. Taxes can have a significant impact on the cash flows from a project. The design engineer needs to have a basic understanding of taxation and tax allowances such as depreciation in order to make an economic evaluation of the project. [Pg.352]

Assume a 10-year straight-line depreciation for both options. Do you agree with the utilities engineers conclusion that lake-source cooling is economically advantageous ... [Pg.134]

The generalized economic analysis expression in Eq. (11.1) is particularly adapted to corrosion engineering problems. Given the numerous uncertainties associated with most corrosion problems this equation can provide fairly good estimates of prevention and control alternatives. This equation takes into account the influence of taxes, straight-line depreciation, operating expenses, and salvage value in the calculation of present worth and annual cost [11]. [Pg.442]


See other pages where Engineering economics depreciation is mentioned: [Pg.10]    [Pg.141]    [Pg.81]    [Pg.201]    [Pg.674]    [Pg.205]    [Pg.268]    [Pg.278]    [Pg.4]    [Pg.205]    [Pg.268]    [Pg.984]    [Pg.988]    [Pg.359]    [Pg.15]    [Pg.1142]   
See also in sourсe #XX -- [ Pg.1288 ]




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