Economic evaluation summary-shipyard example
| 1. | Estimated Annual Savings (present minus proposed costs*) | $180,000 |
| 2. | Welding Investment** | $200,000 |
| 3. | Annual Depreciation (Line 2 divided by 5 years) (assumes straight line depreciation) | $ 40,000 |
| 4. | Annual Savings After Depreciation (Line 1 minus Line 3) | $140,000 |
| 5. | Profit After Taxes (66% of Line 4) | $92,400 |
| 6. | Annual Cash Savings (Line 5 plus Line 3) | $132,400 |
| Return on Investment (Line 6 divided by Line 2 × 100) | 66.2 % | |
| Payback Period (Line 2 divided by Line 6 × 12 months) | 18.1 months | |
| *Assume the shipyard uses a combination of CC-only welders, CV-only welders and/or multioperator welders not suitable for carbon arc gouging or flux cored welding. Because operators need stick for open root welds, flux core for the fill passes and carbon arc gouging to back-gouge each weld, they need to switch machines and/or reroute leads twice per week. Each switch takes two hours, making for a weekly total of 200 hours. Assuming 20 weeks of hull fabrication per year, operators waste 4,000 hours each year. At an overhead rate of $45/hour, the yard pays its valuable welders a total of $180,000 for a task that can be eliminated. |
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| ** Approximate list price of eight XMT 350 inverter racks with six-arcs each. | ||
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