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8.1 Costs
Cost may be defined as the total offering that must be traded in order to achieve the
required end result. It includes money, effort, labour, insurance, resources, materials,
equipment, https://www.51lunwen.org/liuxuelunwendx/land, taxes, legal costs, lost investment opportunities and every possible thing you can think of that has to be given up or traded for the desired end or product. Often, it is possible to convert all those different cost elements into a common basis, usually money. The subsequent cost analysis can then be carried out on a monetary basis to minimise the total cost, effectively trading one cost element against another to find the best possible compromise.
Costs can be viewed as being made up of initial and running costs or, fixed and variable costs.

8.1.1 Initial versus Running Costs
A distribution overhead line, substation, or any other item of plant has both an initial cost incurred in its construction and a running cost incurred in keeping it in service. The initial cost is incurred only once and includes every thing that is required for the initial operation of the overhead line including planning, design, construction, land costs, installation, commissioning, labour, legal costs, etc. Running costs continue as long as the line is in operation. These include maintenance, inspection, repairs, replacements, electrical losses, insurance, transport, etc. Running costs are usually budgeted for on an annual basis.

8.1 shows an example of the costs of a new distribution overhead line broken into
initial and annual running costs. Note that although the initial cost is usually incurred over a period of many years, during which the item of plant is designed and built, it is usually included as a single budget item in a specific financial year. This is why Fig. 8.1 shows the entire initial cost of the project, incurred during years 1-4, as a single cost item in year 4.

8.1.2 Fixed versus Variable Costs
The cost of our new asset e.g.distribution overhead line or substation may also be viewed as being made up of fixed and variable costs. Fixed costs are those that do not vary with any variable element of the analysis, such as loading. For example, the annual costs of inspections, planned maintenance, testing, insurance, etc. required to keep an 11 kV overhead line in operation are the same regardless of its loading. However, the line losses do vary depending on its load and these are variable costs. Similarly, transformer iron losses create a fixed cost that is not a function of the transformer load, unlike the transformer’s copper losses that do vary with loading.

8.2 shows fixed and variable
costs for 代写留学生论文our new overhead line. In many engineering economic calculations, all costs areS8: Economic principles
133EEE8044: Fundamentals
usually treated as fixed costs except the variable costs of operation such as electrical
losses.
8.1 Initial cost and continuing annual costs.
8.2 Fixed costs and variable costs.

8.2 The Time Value of Money
Suppose I were to ask you to give me ￡50,000 today. And suppose I was to promise that would give you the money back in 5 years time. Chances are you would say no, not
because you don’t trust me (perish the thought), but rather because you know that ￡50,000 today is worth a lot more than ￡50,000 in 5 years time. Even with本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。