Izvorni znanstveni članak
https://doi.org/10.13044/j.sdewes.d5.0140
The Importance of using Discounted Cash Flow Methodology in Techno-economic Analyses of Energy and Chemical Production Plants
Zorka Novak Pintarič
orcid.org/0000-0003-0054-6567
; Faculty of Chemistry and Chemical Engineering, University of Maribor, Smetanova 17, Maribor
Zdravko Kravanja
; Faculty of Chemistry and Chemical Engineering, University of Maribor, Smetanova 17, Maribor
Sažetak
This paper demonstrates the correct application of discounted cash flow methodology for evaluating and designing energy and chemical production plants. Such processes usually correspond to capital intensive long-term projects. Simple economic criteria, like the
profit or production cost are insufficient for this type of decision making because they do not take into account the time value of money and underestimate the profitabilities of the evaluated plants. This paper shows that some of those criteria based on the discounted
cash flows establish suitable compromises between long-term cash flow generation and profitability. As several alternative options are usually evaluated in parallel, it is shown how to rank mutually exclusive alternatives properly and how to select the best option
from among them. Two large-scale case studies demonstrate that using discounted cash flow methodology can result in substantially different decisions than non-discounted criteria, however, these decisions are affected by several input parameters.
Ključne riječi
Discounted cash flow analysis; Time value of money; Net present value; Profitability; Process
Hrčak ID:
181492
URI
Datum izdavanja:
30.6.2017.
Posjeta: 1.287 *