技术经济英文版演示文稿C1.ppt

Solution Since both the benefits and costs would change with changing the price, the criterion should be maximization of profit. Using Eq. l.l, profit is defined as P=B-C For example, for a price of $.06/page, we can calculate the profit as P = 0.06×25,000-(500+0.3×25,000)= $250/ machine / month Similar calculations can be conducted at other prices as below Copies Made /Month Price Charged $/Page Benefit/Month $ Cost/Month $ Profit/Month $ 25,000 0.06 1,500 1,250 250 50,000 0.05 2,500 2,000 500 75,000 0.04 3,000 2,750 250 100,000 0.03 3,000 3,500 -500 Example 1.6 Drilling of an oil well costs $250,000. Initial tests indicated a marginal well. The well will cost $40,000 to complete and will produce 15 bbls per day for a year declining at a rate of 20% per year. The operating costs are expected to be $30,000 per year. Should this well be completed? If it is completed, in which year should it be abandoned if the operating costs remain constant throughout the life of the project? Assume the revenue of oil production to be $19/bbl. Neglect tax consequences.. Solution In analyzing this problem, the cost of drilling should never be considered. This is a sunk cost. Irrespective of whether we complete the well or not complete it, we have already spent the money to drill the well. The decision as to whether to complete it or not to complete it should be based on whether we can recover the cost of completion and the operating costs as a result of the production. If the revenues generated are sufficient to cover these costs, the well should be completed. This way, although we may not be able to recover the costs of drilling, we will minimize the overall loss. The yearly profits from this well are shown below. Year Production Revenue ($) Costs ($) Profit ($) 1 5,475 104,025 70,000 34,025 2 4,380 83,200 30,000 53,220 3 3,504 66,576 30,000 36,576 4 2,803 53,261 30,000 23,261 5 2,242 42,605 30,000 12,205 6 1,794 34,078 30,000 4,078 7 1,435 27,269