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| Author: | Jones, P.C. Zydiak, J.L. Hopp, W.J. |
| Title: | Generalized imputed salvage values |
| Journal: | Engineering Economist
1990 : SPRING, VOL. 35:3, p. 215-229 |
| Index terms: | ASSET VALUATION MICROECONOMICS CAPITAL ASSETS LINEAR PROGRAMMING |
| Language: | eng |
| Abstract: | A classical problem in engineering economics is to reconcile the fact that an asset's economic life may be longer than the study period with the fact that economic comparisons must be based on the economic life. By relating the concept of imputed salvage value to classical micro-economic theory, three contributions are made. First, the concept of imputed salvage value is generalized. Second, it is shown that generalized imputed salvage values are equivalent to the stationary dual prices of an infinite-horizon linear program, thereby providing explicit computational formulae. Third, it is argued that imputed salvage values correctly measure economic value and, hence, appropriately evaluate end effects. |
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