Abstract
The PW and FW methods convert cash flows resulting from a proposed solution into their equivalent worth at some points in time, i.e. at the beginning of the study period for the former or at the end of the latter, by using an interest rate. While the economic profitability of an alternative is evaluated by using the PW or FW value, the PW method makes it easy to determine the economic advantage of one alternative over another, and the FW method is often used to estimate the alternative's worth at the time of sale or disposal. The both methods were applied to the same example to compare their features.
Economic and functional obsolescence is often reached before physical life expectancy. If a structure becomes redundant due to economic and functional obsolescence then the investments made for future maintenance requirements can be reduced. The chance of a structure becoming redundant within each 10 year period of its life was assumed and the maintenance cost was compared by using the PW method.
