Argentum Solutions, Inc.

    Sterling guidance on corrosion and materials degradation
 

Potential-pH Diagrams
THERMEXPERT - Potential-pH diagram generator

Intelligent Tools

POLEXPERT - Polarization Scan Artificial Neural Network Expert System

SEQEXPERT - Sequential Immersion Test Artificial Neural Network Expert System

Corrosion Calculator

Corrosion Rate Calculator


Corrosion Economics Estimator

FINCALCULATOR - Corrosion Economic Calculator


TUTORIAL ON FINCALC - A COST OF CORROSION ESTIMATOR

David C. Silverman


Table of Contents

Introduction-What is FINCALC?
Using FINCALC-a step-by-step procedure
Background
  1. The Time Value of Money
  2. Application to Corrosion Economics
Research, Development, and Testing Input
          Capital Expenditure Input
Depreciation Input
Periodic Maintenance, Repair, or Other Expenses Input
Isolated Repair or Other One-Time Expenditure Input
FINCALC (Cost of Corrosion Estimator)

Research, Development, and Testing Input

Corrosion is a process. Corrosion is not a material property. Literature and tables can provide preliminary guidance for corrosion mitigation and alternative materials of construction. But, unless the requirement is simple, the final decision is deduced from results of a research, development, or testing program. Only with such a program can all (or most) of the parameters that affect the corrosion problem in question be considered. Such a testing program usually precedes the final decision and any subsequent expenditure.

Such testing can employ electrochemical procedures (e.g. polarization scans, polarization resistance, electrochemical impedance spectroscopy, etc.) or non-electrochemical procedures (coupon immersion tests, chemical compatibility tests for non-metallic materials, etc.). From an economic standpoint, the procedure itself is irrelevant. Only its cost and timing are important. FINCALC makes the following assumptions about the test programs:
  • The development/testing program occurrs at the beginning of the project
  • The development and subsequent testing program lasts no more than two years
  • All research, development, and testing are written off as expense.
  • The testing program is NOT included as part of the capital expenditure so its costs are written off at the tax rate chosen.
  • All costs for one year can be "lumped" into one cost that is treated as though paid at the beginning of the year.
  • If testing is anticipated after equipment is functioning, that cost can be treated as one of the isolated costs discussed later.
The user must estimate the total expenditure of research, development, and testing per year and the number of years (1 or 2) over which it would be expected at the beginning of the project. The expenditure can include more fundamental research that might be required for understanding as well as more applied testing that addresses actual variables more closely. That dollar amount is entered where required. Note that if such testing occurs and no capital expenditure is made in the first year (occurring only in the second year), the project life must be increased to accommodate the time such testing occurs.

Previous Page: Background

Next Page: Capital Expenditure Input

Return to Table of Contents




David C. Silverman, Ph.D. - Primary Consultant
E-Mail:     dcsilverman@argentumsolutions.com
Phone:     314-576-3586
Fax:         314-754-9825
Address:   The Argentum House
                14314 Strawbridge Ct.
                Chesterfield, MO 63017