Proceedings of the Institution of Mechanical Engineers Part B Management and engineering manufacture · 1984 · 11 citations · 1 references
BusinessEconomicsFinanceDecision AnalysisFinancial EconomicsInvestment ManagementDiscounted Cash Flow ValuationInvestmentInvestment AppraisalProfitability AnalysisReturn AnalysisValuation AnalysisCapital Investment AppraisalFinancial AppraisalInvestment Decision CriteriaMachinery Investment DecisionsNet Present ValueReal Options ValuationReturn On Investment AnalysisValuation Methodology Selection
By evaluating the parameters relating to machine tool investment, with the aid of an integrated suite of programs based on discounted cashflow principles, it is shown that CNC machines are viable over a much wider range of applications than was previously considered. The program, as described in a companion paper (1), has been used to assess the effect of each parameter in the financial appraisal, with the corresponding results being discussed. The paper then goes on to describe how this technique can be readily used by a company to evaluate a range of possible options, thus enabling the optimum investment decisions to be made. Finally, it is shown that because previous authors used an incorrect methodology to evaluate returns, this resulted in an understatement of the financial benefits of CNC.
1