ABSTRACT
This part conclusion presents some closing thoughts on the key concepts discussed in the preceding chapters. The part discusses the present worth (PW)-, future worth (FW)-, and annual worth (AW)-method based on the worth of the project. In the PW-method, reference time is the present, while in the FW-method it is the future. In the AW-method, rather than a reference time marker, the entire duration of the useful life or analysis period becomes the time window. The attraction of the rate of return (ROR)-method lies in the fact that ROR is measured in terms of percentage, which is understood by most professional people. Computer systems have rendered the ROR-based decisions manageable. The benefit-cost-ratio (BCR) method is used primarily in evaluating government projects. As in ROR-analysis, BCR also requires incremental analysis for variable-input-variable-output multi-alternative problems. The ROR-method is widely used in industry, especially in financially healthy companies with long-term investment strategies.
