TOI = WeI +FCL

9)
Lang Muttiplicgth factor/Insto |Qth
FCI Capitol that ís needed to sypply the factor
x(belívered
essay many facturing ond plat facilitíes|(CL) =(Lag Factor) equiprnert
FCL= hanufachuing Non-mdnyfoctng (rct) cos)
FCI FCI
2oMonu
facturína. Capital divecty qss0cjated
FCr
coth NanYfac) uring pro, 4) Trn over ratio
NOD-manu
fac - Annua Sales
Capitl dred ly not Trnover =Goss
9ssocjded wth many Ratjo (TR)
facturing pro.
(incdica stor) S) Investment Ratío / Capital Rotio
FCr = (Dírec+)+(Irdírec!)
Cost tost nvestcnt.
Ratio
FCE
Gross -Annua Sales
Ihdírcct costs - Fngineering supervision,
ATm des n,supevísonc consttuction
r s- Without decucton
Gros GA taxes
Gros Annu) -Ag selling CAnnu
Ronstryctor fees
,
Sturtup expenSes c (Prodnare)
.
Sales Prise
+ingency fee
Womrking apital T- Copîtal necded
unni ond». t+ Thterest is C+ 2 tYpes ) símple T
tO Keep the plat in ompound I.
i) simple I-o At cgch i)
4 Me+hod to find FCI time interva, intettst is
)' ost Thder-method chn ged on pincíple amount ohly
o iveh Sp = PC+in) Sh Accumulased Suo
cost indez is an inder value for O- n y
time rela
tinne showing the ost at that P-> Paincfple cMt i interest rate
tive to o certtin hose time. n= Servíce tine
4-Where, Ge &rCy gre Cost
i.e:
(OP equípment n y
if) Cempund Ipterest
yr ep. boving same
inder values
Capacíy
Sh = P(0+í)" t any
Interest for itercst period js
method (Used for lqged
chnged on principle qmnt plus the inter
)Cost caling est cmnt recjeved in d preyious T

Capocrty equir)

o,6 Where, x &t dre iere mno, Of-interes

(1+in)" perjod in one yn
C hre the capaciy
O equ ip mert havig Im- ggte cn other period basís
în sae y, = ere lapbya -+ Annua j rte
Gernerally
n+ost salin9
factor/ index
 Rgtt Suppose, Wo qe ddding a
at tha
tnd ot cach yr. & inyeeted A
at
Bodyet t intcest oD 0ther time
no., one yT. 4th yr thes P
volut f
busis ond i períd in
p 94(30 -4)

|1etA
(1+) =((+im)"-) Annuitt
F= PCI+i)
S* Annuiy (o dinny Arnuit)
+ Equad qmount payment made at th fA

F P()"=A [ri)'-]
at the ehd ¢ cqud itervau
a y
onsjder SCUe,
A A *
Annyîty Oue
P Whencver payment made t the
js
Stat t eQch yr/ Start ot ea Ch
** Present loth o
Anpuity inteva otíme Ís KhouD Q3Abrut
Dye
= yture
t (1+in)" Fdue (+) Fordinary

Pdue = CI+í)Pordinony -Present

S Time value o+ mcney
LWhere, Fdue &I Pdue gre futurt s pre
oundin9 Stnt worth ot anDuft dye.
e
Investe
money
Discourtin fordínay fon dipgy drc Auture
&

Pesent worth ot rdinsy arnut

y * otíneous Ihterest Rote
Wben m+ then intereot rate o
s
(r+í)= bisconptng o
mpundig caled as contineous Te
foctor
Discouhting Chonge is very Shg &e ne. C
Nte tst
facto
charged y
is vey bigh.
ierr (It)I
Etd
of
cach / erept fon d
.t)

A
 tet Vo-+ BooK vale/value c- gsset in
'a' th ym
When Vo e V - (Vqlue of 9sset deprecjaed

etpctuityCAnnuty for o
tirne)
SolvggAmot C mont earned
(V:) Gfter sellíng ustd produc
Equa
omt of
payment made at the'
hQs no fuyther usefu
ng c cqua tme îbtervd for c0
tmet SCraP,gsset-
Vlue
iee gnd sold forr Scap value
Consíder We're ma<ing payment o
C t
the tnd of every yr ypto @ time * FMethods to Colcutqtt cdeprecíqtnmoney
+) tshfch consjder time vqlue ot
L+i) sinKíng Fund Method
be,Y tbich dont onsíder tíme
Cf
volue
PresENt-woth Ct perpetvity wjl
oney
method
i) straight lire
i) Decibíng
Balonce method /íxed Z
mne

ii) Double Declíning. method/200.

to Jsti. :

(I+i=Gr ) Sum ot yr- digit metbod.

q= Is+ term) ) straibt ethed

Líne
Deprtciatíon /yr is constart
C= perpetuity for o time
V- Vs = Deprccjo ble Annt.
P= preseht woth of
per
petuirg. de YNa aDepreciation )
V =
V- 9d Book volue ih any 9 yo.
Capitalýzed Cost
* TVgVs BcoK VQlúe t-end csevýce
(oriina eot) [cost for

cemeht
[Cost for c
maintainah ) Declining
ce
tieei
Bolqnce Method/ixed
netho
.
t*Depreejation in gry yr.
K =V+(V-Vs) + -gintoínance . O÷ VOlye o
is
gsset before tha y.
the Fixe

(
valye of
any qse+ before)
in foctor
Present worth (y-vs) that yr
=
foo ao da f.Vo
Teplacentnt
O

tVo Vs V(-p)°|-Boo k
value
of ser
hd více
*_Depreeíqtion the vqtue of- the
9sset wfth fme
in
t> Va V(|-f)"
- BOok Value in gny
Qth y:
Boo K valye /Ungmon tísed
vlue
Lo Valye of qsset ib g
ivn yo
 * Profítabilít sjs
Analy
y

focter ie Si-+ income frop) 5gles jn ih

cost Ct operotn wítho ut deprecia
da f(Va-) =
Va-- Va C-
si-c) PBT/Gross rofit
i) Double Decliníng Balqnce Method
Gi-ci-d =
-di) Taxgble Inome
(200%. method)
jn any yo.
When Vs bccorne zero this method depreeía îh
=
Capno be us ed. (sí- G-di) 4i Tax amnt /Tax payable

f= 2-ixed o
foctor: in double tax oQte in th y:
declín ing method,
í-ci-dí)0-+i)= PAT
+ve , zero, ve)
* Cosh Flow (Can be
da = (n-a) (y-v) (ToEa
money)-((Total money)
2

this mehod, deprecjgtion in

By any yr. cash Flow = PAT + deprec q1-n
depends upons S-ef-di)(-+1) +di
i) no. servíce life = (n-o +)
rerigip ed Cosh floO =
PBT- Tax Pry ed
f) Sum of no. Gt Servjce En =hCn+) (Si-ci) - (si-cf-di)ti
2.

the mGmont
t
SOYDM ives * PoPítobility Analysis
yo Used to copqir the 2 Atethatives
deprecjqtíon în Jst
money
J Capitolísed cost method
(+íme vaqtue ot
•) Sinking Fupd Method
R=(Ter) + FCI-Vs 4-When C,=a
to be sink in rderto
i Aryt th0t bas Deprecfation is sineiD
g Cn
Compensote the
furd
pth
TCI -FCI+lcI
In order to Qcc
NPy method
depreat dmpt ; bow mucbNPI mehod
muldte the inyested pifferepce beth q|| cash Aows
pre
equu qmnt/per to be & TCI
F
amnt SeNt wob
= Deprecigth
V-Vs Consider wcI s also ecoring
TCK G

y
4upto Qth
(+)9
-
.NPW=(+i)+ealiti)
(1+1)-) CFnC+1)-+[(Vst LJe)(0+
 when G, Gas-- Eh ie. Cash flo ios s)Dis Counted Pay-bacK Perigd
o Thjs metbod
mettocl,
o mon
t egu înclude time vqlue
Dfscounted poyback perod ís- the ro.
o
NPW Vs+1C TCI y/
Of perfod in whích al' osh b-p
ecomes equalTCI
Díscounted Pay back/Payout perrod
9)
Present Worth metbod (PW) > Tíme reguíred to fnyestreturn f
ment if wE Cohsfderíng time value
money.

+[(vs+de) (t+49 "i is gíven

then L¢-SOve fo
=
PW
metpd/ Payout tíme
) Pay bgck Perjod
(Doesnt consfder tíne value Cf mopey
Aterngtíve havíng Eime requfred to retyrn depreciable
FeL is PBP
Pacfferred
NPH = 4ve) pre ferred PBP Deprecfable FT
zero+ Preferred Ayg. Cash low per yo
NPA = fve) Non-

earning- enpendiure PBP = Deprecjgble' FC

4) iscounttd ash fleo rote Cf tetun

method =n
tate Ct i t ohjcha
THe cas h
fo PBP = Deprecfobje FCI
(Any cash flo0
becomes equa to TeL
It is i ot wbfch NPW =0
cash fHoû = PAT + deprecítíon
High f is pre ferredl. =
PBT- Tax payed
8) Ra te o Retyrnmethod ROR)
O Rate On Iovestment (ROI)
ROR= (Avo Profit) EN
TC TCI

Ak Bregk Even AnglyS)St No

NO
Proft
LO SS
TotU prod TDtU income
COSt Arom

Preset
Of
Tot-y
Anpuity iDvestmert
 xed (AFC)
Total prod"cost sfAnny
chorge
+ (Annuau overbead
deest Vary COSt
oith pro +| Gener Expenses
+ Dircct prod cost D PC)

Nany wítb given in(Rslunit)

TotaJ incomey
Arom Sale
RS
Drc-4Fe
8EP
TPC
=

-Proit

-LOSS
BEP Rrocn Rate
Break Even
Rron

S
To tal Annya cost CTAe)

TAC = Annya ixed Apnua

COSt Yoig ble
Co st

TAc AnnuaJ fixeo Annua

ope otiy
COSt CoSA