A CAPITAL EXPENDITURE MODEL FOR RAILROAD EQUIPMENT

This article was initiated as a result of private research undertaken in the area of the econometric cost of capital in the transportation sector of the U.S. economy. It is presented as an efficient and unbiased model of evaluating capital equipment investments by railroads utilizing a Capital Investment Computer Program (CICP). The basic model shows that total net return can be used effectively for the capital budgeting program and for indicating the order in which a set of proposals should be used to maximize return on investment. The model can be extended using Monte Carlo simulation to determine the nature of risk inherent in any investment plan. It should be possible to determine the right mix of proposals such that expected profits are maximized without an undue element of risk.

• Record URL:
  • https://hdl.handle.net/2027/mdp.39015021808780?urlappend=%3Bseq=123
• Availability:
  • Find a library where document is available. Order URL: http://worldcat.org/issn/00410713
• Corporate Authors:

  Eno Transportation Foundation

  1250 I Street, NW, Suite 750
  Washington, DC  United States  20005
• Authors:
  • LACKMAN, C L
• Publication Date: 1975-1

Media Info

• Features: Figures; Tables;
• Pagination: p. 113-132
• Serial:
  • Traffic Quarterly
  • Volume: 29
  • Issue Number: 1
  • Publisher: Eno Transportation Foundation
  • ISSN: 0041-0713

Subject/Index Terms

• TRT Terms: Budgeting; Businesses; Capital investments; Computer programs; Economic analysis; Financial capital; Freight cars; Information processing; Investments; Mathematical models; Monte Carlo method; Planning
• Old TRIS Terms: Computerized planning; Freight car investment
• Subject Areas: Economics; Finance; Planning and Forecasting; Railroads;

Filing Info

• Accession Number: 00083048
• Record Type: Publication
• Files: TRIS
• Created Date: Apr 8 1975 12:00AM