Determining the optimal moment for replacing equipment

Eleodor Popescu

MPRA Paper from University Library of Munich, Germany

Abstract: In the present work I tried to reach two main objectives. The first consists in determining whether the theoretical methods regarding the ascertainment of the optimal moment of replacement can be used as tools in adopting a decision of replacement and upgrade of fixed mechanisms in a company. The second objective is to support those investors or managers who, having a technological professional educational background, do not have the possibility to finish studies in the economic field, with emphasis on the information and working techniques necessary for adopting and implementing a development investment decision. Many times the most efficient technical or high-performing solutions, proposed by engineers, do not provide the best solutions or financial effects, determined by economists. That is why there are often contradictions or even conflicts between the approach method and that of putting into practice the company’s activities, especially investments.

Keywords: Investments; development investments; fixed mechanisms; operating period; efficiency; optimal replacement moment; modernized plant; update coefficient. (search for similar items in EconPapers)
JEL-codes: D2 (search for similar items in EconPapers)
Date: 2011-06-09
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