Improve Your Capital Equipment Decisions!

Of the many opportunities in the mining industry to invest funds to improve operations, there is always some limit in every company as to how much can be spent each year for the acquisition of capital assets. Generally, there are many more opportunities for investment than funds to make the investments. As such, one of management's goals is to select the most profitable of all the opportunities available. Each opportunity must be carefully analyzed for its potential percentage rate of return. This percentage return or return on investment concept is an accepted financial yardstick of business profit- ability. For today's mining engineers, this problem resolves itself in the job of determining how to in- vest most productively the cash that is flowing from their operations so that it will multiply in value. There are four basic types of capital investments: Strategic investments, such as selecting a plant site, are those that affect virtually all long-run plans of a company. Change in a company's product line and expansion of company facilities are two other types of capital investments.