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To: rudedog who wrote (44640)	5/24/1998 1:03:00 PM
From: Chuzzlewit	Respond to of 176387

Rudedog, you said Here again the argument works for a single purchase but not for a continuous series of purchases over time. No, this technique works for any pattern of purchases, and can change the pattern as time goes by depending on conditions. There are multiple inputs to this, each requiring accurate assessments and forecasts. These parameters consists of internal cost and benefit projections as well as external economic considerations. You assemble the expected costs and benefits such that you can calculate expected cash flows (which includes tax consequences). The choice to do nothing is always one of the options. My experience is that a lot of managers have an excellent handle on the technical side of the purchase decision but use very questionable (I'm trying to be kind here) economic analysis to arrive at their decisions. This is one of the few areas in which economic analysis can provide unequivocally clear, rational answers. It is simply a method that reduces seemingly unconnected facts, forecasts and desires through rigorous mathematical analysis into unambiguous metrics by which the manager (IT or any other) can make a substantiable decision. TTFN, CTC