An Alternate Method of Evaluating the Economics of Engineering Projects

Abstract

The so-called cash flow method is described for the economic evaluation of engineering projects in which savings in operating costs are a large factor in their justification. Equations are developed for normalizing nonuniform yearly charges, including income taxes and depreciation charges and allowances, in the early stages of the calculations. These equations simplify economic evaluations whether cash flow or the more common minimum revenue criterion is used.