Imputed Interest

Imputed interest covers investment interest lost due to expenditures for the purchase of the machine. It is the average value of the machine over time, which is assumed to be midway between the initial value and the salvage value:

Imputed Interest = ((Total Cost Of Machine + Salvage Value) / 2) * Imputed Interest Rate

Total Cost of Machine = Machine Price + Installation Cost

Machine price (specified by the machine property Machine Price)

Installation Cost = Machine Price * Installation Cost Percent

Machine price (specified by the machine property Machine Price)

Installation cost percent (specified by the machine property Installation Cost Percent)

Salvage Value = Machine Price * Salvage Value Percent

Machine price (specified by the machine property Machine Price)

Salvage value percent (specified by the machine property Salvage Value Percent)

Imputed interest rate (specified by the VPE variable Imputed Interest Rate; 0 in aPriori starting point VPEs)