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  • NPV ($) = -Ci + ΣPV: Without Pump in M-House 5 2 14000 2 PV 0.2 0.753 33.67 26 1

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    Ahmed Elswesy
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    This document compares the costs and benefits of replacing power pack oil for a crane with and without a pump installed in the maintenance house. Replacing the oil takes 2 fewer hours and saves 2 hours of activity duration when a pump is used. Both options are performed every 14,000 hours over a 2 year period. Installing a pump costs $1,500 initially. Based on calculated cash flows over multiple 2-year periods, installing the pump has a positive net present value starting after the second period, making it a good investment choice.

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    NPV

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    This document compares the costs and benefits of replacing power pack oil for a crane with and without a pump installed in the maintenance house. Replacing the oil takes 2 fewer hours and saves 2 hours of activity duration when a pump is used. Both options are performed every 14,000 hours over a 2 year period. Installing a pump costs $1,500 initially. Based on calculated cash flows over multiple 2-year periods, installing the pump has a positive net present value starting after the second period, making it a good investment choice.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    8 views2 pages

    NPV ($) = -Ci + ΣPV: Without Pump in M-House 5 2 14000 2 PV 0.2 0.753 33.67 26 1

    Uploaded by

    Ahmed Elswesy
    This document compares the costs and benefits of replacing power pack oil for a crane with and without a pump installed in the maintenance house. Replacing the oil takes 2 fewer hours and saves 2 hours of activity duration when a pump is used. Both options are performed every 14,000 hours over a 2 year period. Installing a pump costs $1,500 initially. Based on calculated cash flows over multiple 2-year periods, installing the pump has a positive net present value starting after the second period, making it a good investment choice.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 2

    Activity Duration (hrs)

    Activity Duration Saving (hrs)


    Activity Frequency (hrs)
    Activity Frequency (Years)
    Initial Cost "Investment" ($)
    Discount Rate (Per two years)
    Crane Utilization
    Contribution Margin ($)
    Crane Productivity (MPH)
    Calculated Periods (Per two years)

    Ci
    R
    U
    M
    P
    n

    TLS Power Pack Oil Replacement (Per STS crane)


    Without Pump in M-House
    5
    2
    14000
    2
    PV
    0.2
    0.753
    33.67
    26
    1

    FV ($)= U*M*P*S
    (1/(1+R)^n)
    PV

    NPV ($)= -Ci + PV


    GOOD CHOICE & INVESTMENT starting at n=2!

    il Replacement (Per STS crane)


    With Pump in M-House
    3
    2
    14000
    2
    1500
    0.2
    0.753
    33.67
    26
    1

    1318.38252
    0.8333333333
    1098.6521

    -401.3479

    INVESTMENT starting at n=2!

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