Capital Expenditure Decision Making Tools
At the 1997 PMPA Management Update Conference, PMPA members Jim Heller and Peter Rosenkrands, of A. B. Heller Inc., Milford, MI, and Rick Dawes, Enoch Mfg. Co., Clackamas, OR, unveiled spreadsheet applications designed to assist precision machined products manufacturers in making complex capital expenditure decisions.
Project Justification Spreadsheet, created by Jim Heller and Peter Rosenkrands, is an MS Excel workbook consisting of two worksheets which examine cash payback and net present value calculations for two different machine tool purchase options. A third worksheet provides a set of tables and constants used to support the cash payback calculation. You can also download a Readme file which provides an explanation of the input data and calculated data for each of these worksheets.
Click below to download another sample workbook which uses the same methodology to compare payback and net present value of two other machine tools.
You can also download Capital Expenditure Comparison Chart, developed by Rick Dawes, which uses the techniques pioneered by these three members to investigate the optimum payback to a company from a number of different types of investments. The data in this spreadsheet is fictitious and intended for demonstration purposes only. Enter your own data in this spreadsheet (numbers in red) for answers to questions such as “If I had x dollars to spend, would I be better off buying a good CNC machine, or the best CNC machine, or a copier for the office, or a new fork lift?”
These spreadsheets have been written to assist the developers in their internal capital expenditure decision making. The developers have been kind enough to make them available to the entire membership. PMPA and the developers offer no warranty for the use of these products, nor will they be able to offer any support for their use. These spreadsheets are tools to assist in the decision making process, and members who use them do so at their own risk.
Capital Expenditure Comparison Chart
Project Justification Spreadsheet – Readme File
Project Justification Spreadsheet
Machine Justification Spreadsheet[S]