Showing papers on "Present value of costs published in 1973"

How much does a lighting system really cost

Abstract: STANDARD COST ANALYSIS TECHNIQUES FOR LIGHTING SYSTEMS PROVIDE INITIAL AND OPERAING COSTS, INCLUDE AN AMORTIZATION FACTOR FOR THE INITIAL COSTS OVER A GIVEN PERIOD OF TIME, AND ACCOUNT FOR CARRYING CHARGES UNDER AN OWNING COST HEADING. ADDITION OF THE CALCULATED COSTS GIVES THE TOTAL OWNING AND OPERATING COSTS. COMPARATIVE COSTS THEN PROVIDE A BASIS FOR CHOOSING ONE LIGHTING SYSTEM OR ANOTHER. HOWEVER THESE TECHNIQUES OMIT SALVAGE VALUE, TAX EFFECTS ON CAPITAL COSTS AND EXPENSES, AND, MOST IMPORTANTLY, DISCOUNTED CASH FLOW. THIS LAST IS BASED ON DETERMINING, FROM THE "TIME VALUE" OF MONEY, THE AMOUNT OF INVESTMENT NEEDED NOW TO REALIZE A GIVEN AMOUNT AT SOME FUTURE TIME. THIS FACTOR IS USUALLY QUANTIFIED FROM THE CORPORATE RATE OF RETURN. THE DISCOUNTED CASH FLOW AFFECTS NOT ONLY INITIAL COSTS BUT ALSO DEPRECIATION AND OPERATING EXPENSES. AN EXAMPLE IS PRESENTED IN WHICH THE STANDARD TECHNIQUE AND THE DISCOUNTED CASH FLOW TECHNIQUE ARE USED TO DETERMINE THE RELATIVE COSTS OF TWO LIGHTING SYSTEMS WHOSE CHARACTERISTICS ARE KNOWN. IT IS FURTHER SHOWN THAT THE SECOND TECHNIQUE CAN BE INCLUDED IN THE STANDARD ONES BY MAKING CERTAIN ASSUMPTIONS AND ALLOWANCES.