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Comment: Re:Lifetime cost (Score 1) 683

by Finuance (#21764474) Attached to: Toshiba Builds Ultra-Small Nuclear Reactor
As far as accounting goes, those costs are on the books when they are incurred. Thus, these maintenance costs (I'm assuming the .05 cents is some figured related to the cost of operation/maintenance) are not "upfront" costs.

However, the costs associated with building the damn thing, transporting it to a location, and installing it are included in "upfront" costs i.e. asset acquisition cost.

And technically, in an accounting sense, buying a nuclear power plant doesn't create an expense to an entity, only an outflow of cash. The asset gets depreciated and only a certain portion of the asset acquisition cost hits the books each month as a depreciation expense decreasing net income along with the maintenance costs.

Now in a finance sense well we need to take into consideration the lifetime cost and figure out the NET present value of the investment (estimate of future costs and cash flows in today's dollars). But then you have to assign some sort of expected rate of return and each year is discounted differently unless you estimate the same value every year for X years....

I took a fish head to the movies and I didn't have to pay. -- Fish Heads, Saturday Night Live, 1977.

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