Models for present-worth analysis of selected industrial cash flow patterns

Abstract

The present worth derivations of six continuous cash flow models are presented for common industrial economic applications. An approximation method is provided for calculating the present worth of cash flows for nonintegrable models. Two special limiting cases of particular use in engineering screening analyses are given for all six models. A practical example is presented for each of the cash flow models. These examples are drawn from the author's industrial and governmental experience and include the following applications: (1) manpower reductions because of computerized process control, (2) construction-period cash flows, (3) sales revenue forecasts for new polymers, and (4) cash flows for a pollution-abatement facility.