Money estimates

The total world marketplace can vary widely from year to year, however, due to the cyclic nature of the textile and coUateral appHcations which can be sizable but short-lived. Perhaps this is the reason that there are no published estimates for the world market for fluorescent color. Also, competition has forced most producers to develop higher strength fluorescent materials that offer greater color yield and a better money value. This reduces unit volume and, in many cases, doUar sales. 

The three general types of cost estimates needed are equipment cost, capital investment cost, and product cost. Equipment cost estimates are needed as part of the capital investment estimate, which indicates the amount of money that is needed to start the venture. Both of these estimates are reflected in the product cost estimate, which is important to both management and marketing groups. 

Capital Investment Cost. The capital investment involved in a proposed project is important because it represents the money that must be raised to get the project started, is used in profitabiUty forecasts, and is reflected in the estimated manufacturing cost of a product. The capital investment is classified herein as fixed capital, working capital, and land cost. Sample capital investment estimate forms provide for separate materials (M) and labor (L) categories, or just combined M L figures. 

Money Flows. Estimation of sales revenues and manufacturing expenses has been discussed. Depreciation, part of the manufacturing expense, is treated separately in the money flow, as is interest. 

Numerically, the difference between continuous and annual compounding is small. In practice, it is probably far smaller than the errors in the estimated cash-flow data. Annual compound interest conforms more closely to current acceptable accounting practice. However, the small difference between continuous and annual compounding may be significant when apphed to very large sums of money. 

It is important when appraising by (NPV) and (DCFRR) not to consider the past in profitabihty estimations. Good money should never follow bad. It is unwise to continue to put money into a project if a more profitable project exists, even though this course may involve scrapping an expensive plant. Other considerations may, however, outweigh purely financiaf criteria in a particular case. 

For many years, companies and countries have lived with the problem of inflation, or the faUing value of money. Costs—in particular, labor costs—tend to rise each year. Failure to account for this trend in predicting future cash flows can lead to serious errors and misleading profitabihty estimates. 

Types and Accuracy of Estimates Capital-cost estimates may be required for a variety of reasons, among others to enable feasibility studies to be carried out, to enable a manufacturing company to select from alternative investments, to assist in selection from alternative designs, to provide information for planning the appropriation of capital, and to enable a contractor to bid on a new project. It is therefore essential to achieve the greatest accuracy of estimation with a minimum expenditure of time and money. 

Greater accuracy of estimation may be achieved, within limits, by the expenditure of more time and money. The greater the accuracy required, the greater the time and effort needed to obtain the design and cost data prior to making the estimate. 

Project Control Having made a good estimate of the capital cost and the expected construc tion time, it is essential to introduce an effective system for controlling expenditure of time and money during construction. Good capital-cost control can cut down expenditures even when the definitive estimate is not veiy accurate. It is most important for management to receive early warnings if overruns in expenditure or time are likely to occur. 

Once the bids are tabulated for specification compliance in the form of a chart for easy review by all others involved in the project, an overall evaluation should be made, factoring in energy cost, first cost, and time value of money using an established economic equation. Most companies have a standardized formula. If the data are available, total cost of ownership can be estimated, which for larger equipment is considered a good measure for evaluation. 

Thus, bench or pilot studies are necessary to avoid technology misapplication in the field. The loss of time in treatment or the requirement to provide additional treatment for the waste is very expensive. Therefore, the relatively small costs and time needed for these studies make them useful tools in treatment selection. Bench-scale treatability studies for demonstrated technologies can cost between 10,000- 50,000 and take up to 6 weeks. Demonstrated technologies are those for which the major design parameters and treatment efficiencies are well understood. Innovative (and some biological processes) will require substantially more time (4-16 weeks) and money ( 25,000-> 200,000). These are estimates, and actual time and costs are going to depend on what kind of technology is under consideration. 

Human resources, whether in-house or retained by contract, cost money, and represent either a direct or an indirect investment. In lobbying for PSM resources, be realistic about the time you think the effort will require underestimating the level of effort can raise management s expectations beyond your ability to meet them. At the same time, estimates of staff required can t ignore prevailing company priorities for example, a request for five new staffers during a hiring freeze is unlikely to be favorably received. 

The second approach estimates the monetary value to individuals and society of health and social well-being and life per se. In practical terms this requires assessment of the amount of money which individuals would accept as compensation for reductions in health or life expectancy, or the amount they would be prepared to pay for improvements in health or life expectancy. The methodology for this approach is still being tested and developed. 

In the near future new drugs for the treatment of Alzheimer s disease are expected to be licensed, and it would be extremely valuable to be able to compare them in a clear and well-defined framework. In addition, if economic evaluation is to inform health and social care providers and policy-makers about the potential impact of new interventions in practice, estimation of the value for money of these new interventions requires consideration of (a) the perceived and objective risks and benefits of care (b) attitudes of people with... 

All the analytical methods mentioned to separate, identify, and quantify chlorophylls and derivatives consume time, money, and samples. As alternatives, industries have been employing non-destructive methods for surface color measurements that are not only indirectly related to chlorophyll content, but may also estimate the pigments directly in tissues, leaving the sample intact and enabling serial analyses in a relatively short time. Eood color affects consumer acceptance and is an important criterion for quality control. Color vision is a complex phenomenon that depends on both the total content and number of pigments and also on absorption, reflectance and emission spectra of each compound present. 

Cost-benefit analysis also requires a determination of the costs incurred from incident-related fatalities. Reduction in individual risk (fatalities per year) is a key component in risk associated with buildings in process plants. One method of determining the cost of fatal accidents is to estimate the amount of money that society might perceive as reasonable compensation in the event of a fatal accident. 

The initial goal of the preliminary process study is to obtain an economic evaluation of the process, with the minimum expenditure of time and money. During this stage, all information necessary to obtain a reasonably accurate cost estimate for building and operating the plant is determined. It is expected that these costs will be within 10% of the actual costs. 

A certain amount of money must be invested if any product is to be produced. This is referred to as capital. The capital is made up of the fixed capital needed to construct the plant and the working capital needed to operate it. The fixed capital is the cost of building and equipping the plant and all its peripheral buildings and operations. Chapter 9 was devoted to methods for estimating the fixed capital investment. 

The total amount of money needed for research and development, engineering, marketing, and construction prior to the startup of a plant is 25,000,000. After the plant is completed it will take 3 years before the plant runs at full capacity. Diming these years the net proceeds before depreciation are estimated to be ... 

From the cost information, cost engineers can update their estimates so that future estimates will be more reliable. The planners can similarly update their time estimates. Even though this costs money, it is the best way a company can improve its predictive ability for future projects, as well as maintaining control over the current job. 

The revealed preference method is an indirect approach that is used in order to monetize use values. This method observes the real choice between money and the environmental goods. Methods often include observations of consumers or producers behaviour or actions, such as the hedonic price method and the production function method. The hedonic price method determines values from actual market transactions. These transactions are used to see how the price of a market commodity varies when a related environmental good changes, such as the effects of noise or air pollution on house prices. The production function method is used to estimate the value of the environmental effects on production. This method is suitable when consumption or production of a private good is affected by the environmental good. An example is the valuation of ground-level ozone levels by valuing the impact on the production of wheat or timber, which has market prices. The problem with the revealed preference method is that it does not contain all the individuals values that affect the WTP. 

In general, one or more of three methods are used to justify major expenditures. The first, payback, is a measure of the time it will take for cumulative benefits to equal cumulative costs (time to break even). This, by itself, may not be sufficient to compare alternative investments and projects competing for the same limited resources so one of two other methods may be used. These methods, Net Present Value and Internal Rate of Return, consider the earning power of money in making comparisons. Because investments earn compound interest, a dollar to be gained in the future has less present value than one gained today. The NPV is computed by estimating the yearly... 

These 10 sets of problems will familiarize you with arithmetic operations involving decimals (which are a really special kind of fraction). You use decimals every day, in dealing with money, for example. Units of measurement, such as populations, kilometers, inches, or miles are also often expressed in decimals. In this section you will get practice in working with mixed decimals, or numbers that have digits on both sides of a decimal point, and the important tool of rounding, the method for estimating decimals. 

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