Image from Google Jackets

When purchasing equipment, dont forget the cost of capital

By: Language: English Series: NatWest Agricultural Digest ; (15) January 1987, 7-10(4)Publication details: 1987Subject(s): Summary: Efficiency is seen in terms of controlling costs rather than increasing output. It is suggested that "payback" is now probably the best technique for decisions about purchasing equipment . Essentially this means expecting an item of capital equipment to pay for itself within a specified period. The problems and possibilities of this method are considered with a worked example, and discounted payback, net present value, internal rate of return and net terminal value techniques compared.

Efficiency is seen in terms of controlling costs rather than increasing output. It is suggested that "payback" is now probably the best technique for decisions about purchasing equipment . Essentially this means expecting an item of capital equipment to pay for itself within a specified period. The problems and possibilities of this method are considered with a worked example, and discounted payback, net present value, internal rate of return and net terminal value techniques compared.