Journal of Accounting and Management Vision

Journal of Accounting and Management Vision

Designing a model to investigate the replacement of new centrifugal pumps on increasing financial and economic effectiveness instead of old pumps in the oil and gas industry

Document Type : Original Article

Authors
javad einabadi 1
mohammad sajad kerachian 2
1 Assistant Professor, Finance and Accounting Department, Iranian Electronic Higher Education Institute, Tehran, Iran.
2 Master's degree student in Finance - Financial Engineering and Risk Management, Iranian Electronic Higher Education Institute, Tehran, Iran.
Abstract
The oil and gas industry, as one of the most important economic sectors in the world, is always faced with numerous challenges in terms of cost optimization and efficiency increase. One of these challenges is the use of old pumps that have low efficiency and high maintenance costs. This article designs a model to investigate the replacement of old pumps with new centrifugal pumps in the oil and gas industry. The main objective of this study is to evaluate the financial and economic effectiveness of this replacement using financial and economic models. In this research, cost-benefit analysis, net present value (NPV), internal rate of return (IRR) and sensitivity analysis methods have been used. The results show that replacing old pumps with new centrifugal pumps can lead to increased financial and economic effectiveness in the oil and gas industry. This study also shows that using advanced financial models, more optimal decisions can be made in the field of equipment replacement.
Keywords
Financial effectiveness
economic effectiveness
oil and gas industry

Subjects