Feasibility Analysis of Overhaul and Modernization of Equipment

摘要

Overhaul and modernization of equipment directly affect its market value and require significant investments which feasibility needs to be checked. This article analyzes the factors that influence the expediency of equipment overhaul or modernization. The economic effect of repair or modernization is the equipment market value increase and enterprise value change. The equipment market value increase as a result of overhaul and modernization is not the only determining condition of implementation economic feasibility. Firstly, to make an optimal choice between overhaul and modernization of old equipment and the purchase of a new one, it is necessary to compare the economic effect of possible repairs with the amount of costs that will be required in the event of this repair. Secondly, you should consider the possibility of acquiring such equipment, either new or used, but in good condition. The author of the article proposes to compare the cost of replacing objects with the amount of overhaul and modernization cost and to analyze incremental indicators. In general, the economic effect that can be achieved after equipment overhaul and modernization is compared with its cost and considered as an element of business change value. This method can help to analyze whether capital repairs and modernization are beneficial, taking into account the enterprise economic and financial opportunities.