Page 476 - Corrosion Engineering Principles and Practice
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442 C h a p t e r 1 1 M a t e r i a l s S e l e c t i o n , Te s t i n g , a n d D e s i g n C o n s i d e r a t i o n s 443
3. Third term [−(1 − t)(X)(P/A, i%, n)]: The third term in the
generalized equation consists of two parts. (X)(P/A, i%, n)
represents the cost of items properly chargeable as expenses,
such as the cost of maintenance, insurance, and the cost of
inhibitors. Because this term involves expenditure of money,
it also comes with a negative sign. The second part, t(X)(P/A,
i%, n), accounts for the tax credit associated with this business
expense and because it represents a saving it is associated
with a positive sign.
4. Fourth term [S(P/F, i%, n)]: The fourth term translates the future
value of salvage to present value. This is a one time event
rather than a uniform series and therefore it involves the single
payment present worth factors. Many corrosion measures,
such as coatings and other repetitive maintenance measures,
have no salvage value, in which cases this term is zero.
PW can be converted to equivalent annual cost (A) by using the
following formula:
/
,
A = (PW)( A P i%, n) (11.2)
One can calculate different options by referring to interest tables
or by simply using the formula describing the various functions. The
capital recovery function (P/A) or how to find P once given A is
provided by Eq. (11.3):
1
n
P ( + i) − 1
A i , %, n where P = A i( +1 i) n (11.3)
n
The compound amount factor (P/F) or how to find P once given F
is provided by Eq. (11.4):
P
1
F i , %, n where F = P( + i) − n (11.4)
n
The capital recovery factor (A/P) or how to find A once given P is
provided by Eq. (11.5):
A i( + i) n
1
P i , %, n where A = P ( + i) − 1 (11.5)
n
n
1
Several examples of the application of the generalized equation
to corrosion engineering problems can be found in the literature
[11;12].
11.3.2 Condition Assessment
A second major component of life-cycle asset management is system-
atic condition assessment surveys (CAS). The objective of CAS is to
provide comprehensive information about the condition of an asset.
