Economic calculations used to be laborious procedures that could only be properly performed by those who understood the interrelationship of all the factors involved. Calculations of the effects of the initial cost, life, rate of depreciation, taxes, and value of money to the owner/employer have been combined into easily used equations in a NACE International standard that can be used without a great knowledge of economics . This report advocates the use of the discounted cash flow method, which provides ready calculation of net present worth. Factors that need to be considered in calculating net present worth include:
Best estimate of expected life
Length of typical shutdown for emergency repair
Cost of planned maintenance during scheduled shutdowns
Effect of failure on total plant operation
When proposals are made with recommendations based on economic calculations, those controlling the purse strings are more inclined to listen. Calculated options provide them with an objective basis on which to make a decision regarding how and where to spend the money available, and thus add more credibility to a proposal.
Notice that no number is given for the requirement of safety when selecting materials. If the safety of any individual or the public is endangered in some manner by the selection of a material or the use of a corrosion control procedure, these safety considerations have to take precedent over purely economical calculations.
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