Table C. - Discounting table for warehouse docking facility problem
Program
Discount
year
factor
Costs
(P) Benefits (P)
(10%)
I
0.909
$50,000
$45,450
$ 0
$ 0
2
.826
0 (Docks in use)
10,000
8,260
3
.751
0
0
10,000
7,510
4
.683
0
0
10,000
6,830
5
.620
0
0
10,000
6,200
6
.620
0
0
10,000
5,640
7
.513
0
0
10,000
5,130
8
.466
0
0
10,000
4,660
Total present value
$45,450
$44,230
docks would become more economically feasible.
b. If the service life of the docks could be
extended from 7 to 8 years, they could be
economically Justified.
extended from 7 to 8 years, they could be
economically Justified.
Perhaps the service life could be extended
through use of concrete instead of wood. Other
alternatives should be considered.
through use of concrete instead of wood. Other
alternatives should be considered.
The maintenance manager concludes that the
docks cannot be economically justified as pro-
posed. However, other alternatives or modifi-
cations may be developed which prove eco-
nomically feasible. No firm recommendations on
the docks can be made until further studies are
completed.
docks cannot be economically justified as pro-
posed. However, other alternatives or modifi-
cations may be developed which prove eco-
nomically feasible. No firm recommendations on
the docks can be made until further studies are
completed.
6. FURTHER HELP
You have been exposed to several basic economic
principles in this bulletin, and by following
and understanding the examples, you have an
insight on use of economic analysis. The economic
principles discussed were selected in the
belief that they will be of most use to you, the
maintenance manager. No attempt is made to
cover all important economic principles; to do so
would require the services of a professional econ-
omist. Assistance on analysis of maintenance
problems is available from the Operation and
Maintenance Engineering Branch, Attention D-5850,
Denver Office.
principles in this bulletin, and by following
and understanding the examples, you have an
insight on use of economic analysis. The economic
principles discussed were selected in the
belief that they will be of most use to you, the
maintenance manager. No attempt is made to
cover all important economic principles; to do so
would require the services of a professional econ-
omist. Assistance on analysis of maintenance
problems is available from the Operation and
Maintenance Engineering Branch, Attention D-5850,
Denver Office.
For those wishing further study of principles and
practices as applied in the Bureau of Reclamation,
the following publication is recommended: "A Guide
to Using Interest Factors in Economic Analysis of
Water Projects." This publication may be ordered
from the Denver Office, Attention D-7923A.
practices as applied in the Bureau of Reclamation,
the following publication is recommended: "A Guide
to Using Interest Factors in Economic Analysis of
Water Projects." This publication may be ordered
from the Denver Office, Attention D-7923A.
9 (FIST4-3)