engleski

Determining Conditions for Replacing Forest Vehicles Using Cash Flow Analysis

Previous research suggests that forestry practitioners, from both state and private companies, often approach replacement of existing forest machinery without prior business decision-making or without establishing economic criteria. As one of the main reasons for not conducting an analytical procedure of justification for machinery substitution is complex theoretical and practical approaches and mathematical procedures whose acceptance and implementation is not simple. Therefore, the procedures described and applied in this paper are considered more acceptable to practitioners in the process of replacing forest machines, assuming the disposal of relevant data and information. This paper presents the process of analysing the cash flow and the application of the capital budgeting method, i.e. the method of financial decision making: pure current values, internal rates of profitability, period of return and discounted period of return in determining the justification for replacing an old forest machine or acquisition of a new asset. For this purpose, the financial data of the old and new machine's expense and income from accounting records were used.

forestry, replacement of machines, capital budgeting, cash flow

nije evidentirano