Fred J. McCall wrote:
Sylvia Else wrote:

:Fred J. McCall wrote:
: Sylvia Else wrote:
:
: :Fred J. McCall wrote:
: :
: : :
: : :It depends very much how they're used. Diesel engines have a higher
: : :capital cost. They're only have lower total costs if they're used a lot.
: : : Otherwise the cost of capital is more than the lower cost of the fuel.
: : :
: :
: : For a very small definition of 'a lot'. I said 'lifecycle costs'.
: : Fuel costs are about the same. Short term maintenance costs are
: : cheaper on a gasoline engine, generally. Longer term maintenance
: : costs are MUCH lower on a diesel.
: :
: : Yes, if you're just going to buy a vehicle and park it, a diesel will
: : be more expensive. But in that case, why buy a vehicle?
: :
: :
: :Are you using proper discounted cash flow in reaching that conclusion?
: :
:
: You say that like it means something. It doesn't in this case.
:
:
:If you have two possible patterns of expenditure for the same benefit,
:where the patterns differ in how payments are made over time, then the
nly meaningful way of comparing them is to use discounted cash flow. If
: you don't then you're ignoring the time value of money, which is an
:important component of the cost.
:

I'll be sure and let the people that signed my sheepskin for Economics
know all about that.

Hint: Since we're comparing costs over the same amount of time, there
is no need to use discounted cash flow. We're not talking about
present value cost, but total lifecycle costs.

Did you notice the bit about patterns differing over time?

I suppose not.

Sylvia.