Calculation of the static payback period according to the cumulative method (data taken from the
appendicized formsheet, table 10.10).
Input parameters:
- investment costs
- annual revenues
- less the yearly operating costs
- less the external capital costs
= annual returns
The cumulative method allows consideration of different annual returns.
Calculatory procedure: The investment expenditures and annual returns are added together until
the line-3 total in table 8.3 either reaches zero (end of payback period) or becomes positive.
Evaluation: As far as risk minimization is concerned, a short payback period is very valuable from
the standpoint of the plant's user ("short" meaning significantly less than 10 years, the data listed in
table 8.3 pegs it at 5.5 years). Should the analysis show a payback period of 10 years or more, thus
possibly even exceeding the technical service life of the plant, building the plant could not be
recommended unless other important factors are found to outweigh that disadvantage.
Table 8.3: Schedule of data for
calculating the plant payback
period (with case example;
data taken from the
appendicized formsheet, table
10.l0) (Source: OEKOTOP)
Static calculation of profitability (data taken from table 10.10 in the Appendix)
Input parameters:
- average capital invested per time interval, KA
KA
=
initial
investment
2
=
IO
2
- net profit, NP = annual return
- less the external capital servicing costs
- less the depreciation
Calculatory procedure: The profitability, or return on investment, ROI, is calculated according to the
following formula
ROI
=
NP
KA
⋅100
The linear annual depreciation amounts to:
IO
service life
99