Rapid method for capital investment decisions

A simplified method allows ranking proposed capital projects, based on profitability as measured by net present value, before extensive engineering work is done. Engineers with or without financial analysis skills can use Figs. 1 to 4 or equations suitable for use on a calculator or PC to make a rapid, preliminary economic project evaluation. This allows early evaluation of an idea for a new project, before a lot of time is wasted on an unjustified project. Frequently, when making bid comparisons for mechanical equipment such as pumps, compressors, motors, etc., the equipment being bid on by various vendors will differ in efficiency (higher-efficiency equipment will cost more). These curves and equations are also suitable for determining how much additional capital is justified to obtain some measurable benefit, i.e., higher efficiency. This will save fuel, electric power, additional distillation trays or packing to reduce reflux.