Analysis of the costs of a system or component over its entire life span
Typical costs include:
• Acquisition costs
• Operational costs
• Disposal costs
A complete life cycle cost analysis may include other costs such as financial or investment elements such as:
• Discount rates
• Interest rates
• Depreciation
• Present value of money
Showing posts with label week four. feb 3.. Show all posts
Showing posts with label week four. feb 3.. Show all posts
Net Present Value
total present value of a time series of cash flows- used to determine the time value of money
Calculated from:
• Time of cash flow
• Discount rate= rate used to discount future cash flows to their present value
• Net cash flow at the time
If NPV > 0- the investment would add value; if NPV < 0- the investment would subtract value
Calculated from:
• Time of cash flow
• Discount rate= rate used to discount future cash flows to their present value
• Net cash flow at the time
If NPV > 0- the investment would add value; if NPV < 0- the investment would subtract value
Subscribe to:
Posts (Atom)