Anyone else apply the 1/2 x 2 rule

[Rodne Gold]

When Im buying equipment , I apply that rule.
1/2 the quoted/mnfgr output or turnaround or performance.
2x the quoted/mnfgr running costs etc.
If it still makes economic sense then , I go for it.

[John Noell]

Sad but true.

[Keith Outten]

Rodne,

In the back of my mind I guess I have always applied a kind of informal evaluation of the value expected from various equipment purchases. Your equation, although more formal makes it seem a bit dismal but more accurate than a simple gut feeling.

I doubt that sales people will be pleased to see your formula in print :)
.

[Stephen Beckham]

Rodne,

Some times it goes further than just equipment. I'm looking at buying this building I'm currently leasing. The town is in the Guiness Book for being the smallest Incorporated Township in the nation, so since we are land-locked and there are only three to four lots for sale at any given time, I'm going to pay twice as much as it's physically worth, but will get only 1/2 the return on investment - unless I keep it for 50 years!!!

Steve