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    <title>Transport Research International Documentation (TRID)</title>
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    <copyright>Copyright © 2026. National Academy of Sciences. All rights reserved.</copyright>
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    <managingEditor>tris-trb@nas.edu (Bill McLeod)</managingEditor>
    <webMaster>tris-trb@nas.edu (Bill McLeod)</webMaster>
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      <title>Transport Research International Documentation (TRID)</title>
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      <title>ECONOMIC EVALUATION OF ENGINEERING PROJECTS</title>
      <link>https://trid.trb.org/View/90368</link>
      <description><![CDATA[THERE IS A NEED FOR IMPROVEMENT AND STANDARDIZATION IN THE CURRENT PRACTICES IN ECONOMIC EVALUATION. IT IS SUGGESTED THAT DISCOUNTED CASH FLOW ANALYSIS, WHEN PROPERLY UNDERSTOOD AND APPLIED, IS THE MOST EFFECTIVE TOOL FOR DECISION MAKING.]]></description>
      <pubDate>Sat, 02 Apr 1994 00:00:00 GMT</pubDate>
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      <title>USING A DYNAMIC DISCOUNTED CASH FLOW ANALYSIS TO CALCULATE STAND-ALONE COSTS</title>
      <link>https://trid.trb.org/View/312586</link>
      <description><![CDATA[The Interstate Commerce Commission has recently developed new guidelines for determining the reasonableness of rail captive coal rates.  The Commission's decision, Ex Parte No. 347 (Sub No. 1), hereafter Ex Parte 347, adopts Constrained Market Pricing (CMP) as a framework for determining reasonable rates.  A pivotal component of the CMP framework is the stand-alone cost constraint, an empirical test in which the rates of the incumbent railroad are judged against the estimated rates for a hypothetical, most efficient competitor.  Since the hypothetical competitor will, by design, benefit from all of "the efficiencies of a contestable market", the rates it charges will represent "simulated competitive prices".  We have calculated stand-alone costs for a hypothetical railroad using a discounted cash flow (DCF) methodology.  While DCF analysis is an accepted methodology for calculating stand-alone costs, our purpose here is to examine exactly how DCF analysis should be applied in this context.  We argue that a "dynamic" DCF analysis will most accurately simulate competitively determined rates, where the term dynamic refers to a DCF model that continuously incorporates relevant data into the analysis as such data becomes available.  We conclude that a DCF analysis that does not have this dynamic characteristic may misstate stand-alone costs.  Our presentation begins with a brief discussion of the stand-alone cost test, followed by a general discussion of DCF analysis and its applicability as a means of calculating stand-alone costs.  We then present the results of three different DCF analyses, a static model, a long-run equilibrium model and the aforementioned dynamic model, each applied to a common set of cost data for a hypothetical competitor.  From these results we conclude that the dynamic model yields rates which most accurately simulate competitively determined rates.]]></description>
      <pubDate>Fri, 31 Aug 1990 00:00:00 GMT</pubDate>
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      <title>FINANCIAL INVESTMENT TECHNIQUES</title>
      <link>https://trid.trb.org/View/92360</link>
      <description><![CDATA[HIGHWAY ENGINEERING INVOLVES THE INVESTMENT OF LARGE SUMS OF MONEY TO ACHIEVE SPECIFIED PURPOSES FOR LONG PERIODS OF TIME. THE FINANCIAL EVALUATION OF SUCH PROJECTS SHOULD THEREFORE TAKE ACCOUNT OF THE TIME VALUE OF MONEY. DISCOUNTED CASH FLOW, IN ONE OR OTHER OF ITS FORMS, IS THE TECHNIQUE BEST SUITED TO MEETING THIS NEED. IN THIS PAPER, THE VARIOUS METHODS OF FINANCIAL EVALUATION- NET PRESENT VALUE, DCF RATE OF RETURN AND EQUIVALENT ANNUAL COST (SIMILAR TO LOAN CHARGES)- ARE EXPLAINED. THEIR APPLICATION TO SOME HIGHWAY ENGINEERING PROBLEMS IS DISCUSSED AND A PLEA IS MADE FOR THE USE OF THE EVALUATION DATA AS A BASIS FOR EXPENDITURE CONTROL, ESPECIALLY IN THE IMPLEMENTATION STAGES OF PROJECTS. /TRRL/]]></description>
      <pubDate>Wed, 15 May 1974 00:00:00 GMT</pubDate>
      <guid>https://trid.trb.org/View/92360</guid>
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      <title>HOW MUCH DOES A LIGHTING SYSTEM REALLY COST?</title>
      <link>https://trid.trb.org/View/115385</link>
      <description><![CDATA[STANDARD COST ANALYSIS TECHNIQUES FOR LIGHTING SYSTEMS PROVIDE INITIAL AND OPERAING COSTS, INCLUDE AN AMORTIZATION FACTOR FOR THE INITIAL COSTS OVER A GIVEN PERIOD OF TIME, AND ACCOUNT FOR CARRYING CHARGES UNDER AN OWNING COST HEADING. ADDITION OF THE CALCULATED COSTS GIVES THE TOTAL OWNING AND OPERATING COSTS. COMPARATIVE COSTS THEN PROVIDE A BASIS FOR CHOOSING ONE LIGHTING SYSTEM OR ANOTHER. HOWEVER THESE TECHNIQUES OMIT SALVAGE VALUE, TAX EFFECTS ON CAPITAL COSTS AND EXPENSES, AND, MOST IMPORTANTLY, DISCOUNTED CASH FLOW. THIS LAST IS BASED ON DETERMINING, FROM THE "TIME VALUE" OF MONEY, THE AMOUNT OF INVESTMENT NEEDED NOW TO REALIZE A GIVEN AMOUNT AT SOME FUTURE TIME. THIS FACTOR IS USUALLY QUANTIFIED FROM THE CORPORATE RATE OF RETURN. THE DISCOUNTED CASH FLOW AFFECTS NOT ONLY INITIAL COSTS BUT ALSO DEPRECIATION AND OPERATING EXPENSES. AN EXAMPLE IS PRESENTED IN WHICH THE STANDARD TECHNIQUE AND THE DISCOUNTED CASH FLOW TECHNIQUE ARE USED TO DETERMINE THE RELATIVE COSTS OF TWO LIGHTING SYSTEMS WHOSE CHARACTERISTICS ARE KNOWN. IT IS FURTHER SHOWN THAT THE SECOND TECHNIQUE CAN BE INCLUDED IN THE STANDARD ONES BY MAKING CERTAIN ASSUMPTIONS AND ALLOWANCES.]]></description>
      <pubDate>Tue, 13 Mar 1973 00:00:00 GMT</pubDate>
      <guid>https://trid.trb.org/View/115385</guid>
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