Civil Engineering Reference
In-Depth Information
Table 19.3
Comparison between general and simplified PW relationships
PW calculation by the general relationship
Annual
revenues
Yearly cash
flow
PWF
(
i
Present cash
flow
PW of the
project
Year
Investment
¼
10 %)
kU
kU
kU
kU
kU
0
1,500
0
1,500
1,500.0
1,500.0
1
500
400
100
0.909
90.9
1,590.9
2
250
700
450
0.826
371.7
1,219.2
3
0
700
700
0.751
525.7
693.5
4
0
700
700
0.683
478.1
215.4
5
0
700
700
0.621
434.7
219.3
At the end of the life
219.3
a
b
c
d
¼
c
b
e
f
¼
d
e
g
sum of
yearly
f
¼
In the following PW calculation by the simplified relationship is reported
Average annual revenues in 5 years equal to (400 + 700 + 700 + 700 + 700)/5
¼
640 kU
Total investment concentrated in the year zero equal to 2,250 kU
PAF (5 years, from year 1 to year 5;
i ¼
10 %) equal to 3.791
PW
¼
640
3.791
2,250
¼
176.2 kU
Notes
Annual revenues include all kinds of savings and additional operating costs
Annual revenues become effective in the year 1
replacement of components during the investment life, etc.), which often markedly
affect the economic evaluation, must be taken into account.
The same approach can be followed for any other energy-saving investment in
process and facility plants, as it is quite a good way to correlate and to compare
different investments inside a factory.
