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Author: | Spahr, R. W. Schwebach, R. G. Putnam, F. A. |
Title: | Per unit cost allocation of invested capital with anticipated non-level production: the case of extractive industries |
Journal: | Engineering Economist
1999 : VOL. 44:4, p. 332-347 |
Index terms: | Cost accounting Capital investment Production Econometric models Engineering industry |
Language: | eng |
Abstract: | The concept of equivalent annual annuity (EAA) has long been used as a method of costing recovery of invested capital and the required return on invested capital over the productive life of capital project. The authors develop a methodology for allocating capital costs evenly over each unit of production for projects with anticipated nonlevel production. They apply this methodology to data taken from a currently operating gas field in Wyoming. |
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