Profitability evaluation

Keep in mind that many people from a variety of disciplines must be involved in making a process work and developing a successful product. The life cycle of most products includes basic research, applied research, development, scaleup, quality control, cost and profit evaluations, market research, market development, sales, and technical service to make a product grow and mature. Every person involved in this project must know something about the rest of the cycle, in addition to contributing a specific expertise to the cycle. 

Fot illustrations of the applications of continuous interest compounding and continuous cash flow to cases of profitability evaluation, see Examples 2 and 3 in Chap. 10. 

The most commonly used methods for profitability evaluation, as illustrated in Fig. 10-1, can be categorized under the following headings ... 

The method of approach for a profitability evaluation by discounted cash flow takes into account the time value of money and is based on the amount of the investment that is unretumed at the end of each year during the estimated life of the project. A trial-and-error procedure is used to establish a rate of return which can be applied to yearly cash flow so that the original investment is reduced to zero (or to salvage and land value plus working-capital investment) during the project life. Thus, the rate of return by this method is equivalent to the maximum interest rate (normally, after taxes) at which money could be borrowed to finance the project under conditions where the net cash flow to the project over its life would be just sufficient to pay all principal and interest accumulated on the outstanding principal. 

Inclusion of Operating Costs in Capitalized-Costs Profitability Evaluation... 

In the preceding presentation of methods for profitability evaluation, where interest was considered, it was generally treated as finite-period interest compounded annually. By use of the relationships developed in Chap. 7 (Interest and Investment Costs), it is a simple matter to convert to the case of continuous interest compounding in place of finite interest compounding. 

The application of continuous interest compounding, along with a method of profitability evaluation which includes construction costs and other prestartup costs, is illustrated in the following example. 

Definitions to clarify income-tax situation for profitability evaluation... 

Given the following data, determine which investment, if any, should be made by alternative-analysis profitability-evaluation methods of... 

Because of the reduced costs for the NTR computer, profitability evaluation including time value of money will tend to favor the replacement more than does the method of rate of return on investment as used for the solution of this example. 

Incineration, 88-89 Income statemenf 142-145 Income-tax effects on cost of capital, 248-249 on optimum economic pipe diameter, 366-367 on profitability evaluation, 300, 324... 

One can notice that some (most of them) identification numbers in tablet above are missing. That is evoked because we did not take into account latent failures, so states 2 and 4 for each sensor are skipped. This fact leads to the problem that we are not able to get relevant data for profitability evaluation of some mentioned logical algorithm processing from this table. 

The optimal profit evaluated using Q control is greater than that with PI control (as we would expect), but not appreciably so. 

A written report detailing your design and profitability evaluation of the new process. 

The proposed stochastic S-graph framework is intended to support plant managers on the decision-making about the timing of tasks to be performed in each processing unit, the amount of material being processed at each time in each unit, and the amount of final products to be sold in each demand scenario. These decisions will be taken such that the expected profit evaluated at the end of a predefined planning horizon is maximized. 

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