技术经济学文版演示文稿C3.ppt

Solution We can solve this example using the PV analysis. However, it is more convenient to compare the annual costs associated with each machine. The installation cost or the initial cost is called the capital cost. The annual equivalent of capital cost is called capital recovery cost. * Alternative I Using the equation, capital recovery cost, total annual cost = 800+527=$1,327 * Alternative II capital recovery cost= The maintenance cost is increasing at a rate of $200 per year. We can calculate an equivalent constant cost for this arithmetic series, total annual cost = 962+395=$1,357 Comparing the two costs, Alternative I should be selected. As can be noticed from this example, it is much easier to understand the yearly costs to the company by installing the copy machine than simply looking at the present value of costs. If we do calculate the present value, we will get the same answer. * Alternative I * Alternative II Since Alternative I has smaller costs than Alternative II, the first alternative should be selected. Example 3.16 Two alternatives are considered for a given project, A B Initial Cost $10,000 $16,000 Annual Cost $5,000 $4,000 Life, Years 4 8 Salvage Value $2,000 $4,000 If the MROR is 10%, which alternative should be selected? Solution This is a problem we investigated in the last section using the PV analysis. When we compare two alternatives with unequal lives, we can assume that the alternatives have equal lives by repeating one or both the alternatives. The method is called a method of a common multiple. If you assume that such method is applicable, the annual value technique is much easier to use. In applying the AV technique, we will calculate the annual equivalent cost for both the alternatives using the given