Abstract
The aim of this chapter is to introduce the concepts of discounted cash flow in the context of asset management decisions to see how these are applied in establishing asset investment criteria. Asset managers need to have a working knowledge of business finance so they can provide input to business decisions. Outcomes After reading this chapter you will know about:
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Interest rates;
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The time value of money;
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Present value(PV) and net present value(NPV);
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The discount factor;
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Cash flow diagrams;
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Equivalent annual cost and equivalent unit cost;
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The use of Excel financial functions;
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The annuity factor and the capital recovery factor;
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Asset investment criteria;
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Payback period;
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Internal rate of return;
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Minimum acceptable rate of return
Keywords
Interest Rate Cash Flow Life Cycle Cost Payback Period Material Handling System
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.
Copyright information
© Springer International Publishing Switzerland 2015