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Corrosion Calculator

Corrosion Rate Calculator


Corrosion Economics Estimator

FINCALCULATOR - Corrosion Economic Calculator


TUTORIAL ON FINCALC - A COST OF CORROSION ESTIMATOR

David C. Silverman


Table of Contents

Introduction-What is FINCALC?
Using FINCALC-a step-by-step procedure
Background
  1. The Time Value of Money
  2. Application to Corrosion Economics
Research, Development, and Testing Input
          Capital Expenditure Input
Depreciation Input
Periodic Maintenance, Repair, or Other Expenses Input
Isolated Repair or Other One-Time Expenditure Input
FINCALC (Cost of Corrosion Estimator)

Introduction-What is FINCALC?

FINCALC is a web based cost of corrosion calculator. Its purpose is to help the corrosion practitioner make preliminary economic estimates of costs associated with proposed equipment replacement or corrosion mitigation project alternatives. As such it provides estimates of the life-cycle cost of planned options for circumventing corrosion. Preliminary economic analysis should not only be part of any approach to solving a corrosion problem but should also be included as part of any upfront research, development, and testing of alternative materials and mitigation methodologies for a given problem.

FINCALC has been developed to provide a way to make such estimates rapidly so that economic guidance can be provided easily at an early stage. It calculates the net present value and discounted cash flow as a function of interest rate from a few key inputs. The calculator assumes that corrosion mitigation does not produce offsetting income. As such, it treats corrosion as purely a cost. By running the calculator for different cases, the corrosion practitioner can easily assess the cost in present dollars of alternative approaches to overcoming corrosion. Since the calculator is for preliminary economic estimation only, it takes a broad, lumped parameter approach. It accounts in a broad sense for:
  • initial upfront research, development, and testing
  • capital expenditure
  • depreciation with possible salvage
  • periodic maintenance, repair, monitoring, or other expenses and their rate of growth
  • isolated maintenance, repair, or other one-time additional costs
Since corrosion can be broadly defined as the degradation of materials, this process causes the degradation of a material's properties. The result can be a decreased ability of the material to perform in the way that was originally intended. Repairs tend to be required, their frequency and costs possibly increasing with time. In the extreme, corrosion causes the material to degrade to such an extent that it must be replaced. If the material has failed, the loss can extend beyond the immediate problem, for example to leakage of contents, contamination of the immediate environment, or loss of the superstructure if the material plays a key structural role. In addition, corrosion mitigation technology such as cathodic or anodic protection or the addition of a corrosion inhibitor technology may be desired. Equipment associated with such procedures often requires capital expenditure. Each of these events has a cost that drives the decision to proceed versus "doing nothing". In this sense, corrosion is as much an economic problem as an engineering problem. The goal of this tutorial is to provide the background necessary for making effective use of FINCALC. More general information on financial analysis can be found in various college level financial texts. Feedback on the usefulness of this tool is requested. Such feedback can be entered by clicking on the contact information below.

To go to a particular topic, click on the active word colored in blue. Clicking on the word "top" at the end of each section will return to the table of contents at the beginning of each page of the tutorial.

Next Page: Using FINCALC-a step-by-step procedure

Return to Table of Contents




David C. Silverman, Ph.D. - Primary Consultant
E-Mail:     dcsilverman@argentumsolutions.com
Phone:     314-576-3586
Fax:         314-754-9825
Address:   The Argentum House
                14314 Strawbridge Ct.
                Chesterfield, MO 63017