Amoratization for Dummies...

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Amoratization for Dummies...

Post  martin2020 on Tue Jun 21, 2011 5:49 am

I've seen 30-40 year payback terms for large capital items (such as NPP). Keep in mind, IFRS requires us to capitalise not only the sticker price of an item, but the transport and installation costs required to set it up and get it working properly.
For the formula, let P be the total installed price, A the periodic capital charge (sorta like a mortgage payment), r the interest rate per period (as a decimal, not as percentage) and n be the number of periods we have to pay back P.
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