1985-11-11

Simple Financial Evaluation Procedures for Cost Effective Operation of Alternative Vehicles (Cars and Light Commercials) 852258

Simple accurate arithmetic rules have been developed to calculate the internal rate of return on the incremental investment for similar vehicles using LPG or a diesel power plant. Inflation, discounting of future benefits and the different taxation provisions for commercial and private owners are considered. Only estimates of the extra capital cost ($) annual distance ('000 km) and savings ($/1000km) are required to calculate the internal rate of return. For a three year payback on a commercial vehicle the annual saving must be 47% of the extra capital cost to give an 8% internal rate of return. Above the breakeven distance extra savings increase the IRR by 10%/$100 for commercial vehicles compared to 20%/$100 for a private owner

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