Journal article
A deterministic economic model of optimal asset scrapping under the effects of taxes and inflation
The Engineering economist, Vol.69(1), pp.2-36
09/02/2024
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Abstract
This study investigates optimal asset scrapping conditions under taxation and inflation by adjusting Koowattanatianchai and Charles's (2015) model on optimal asset duration, which omits the scrapping problem. We decompose the overall effects of taxation and inflation on the optimal scrapping policy into direct and indirect effects via the discount rate, and find that contradictory results in the existing literature of asset scrapping are all correct since they are compartments of our generalized framework. Simulation analysis is also conducted using the Thai logistics industry, with the results confirming the properties of the developed model and highlighting the importance of inflation and taxation in the surrounding economic context.
Details
- Title
- A deterministic economic model of optimal asset scrapping under the effects of taxes and inflation
- Creators
- Nattawoot Koowattanatianchai - Kasetsart UniversityMichael B. Charles - Southern Cross UniversityMichael A. Kortt - Southern Cross University
- Publication Details
- The Engineering economist, Vol.69(1), pp.2-36
- Publisher
- Taylor & Francis
- Number of pages
- 35
- Identifiers
- 991013172913702368
- Copyright
- (c) 2024 Institute of Industrial & Systems Engineers.
- Academic Unit
- Management; Faculty of Business, Law and Arts
- Language
- English
- Resource Type
- Journal article