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By Hsun Hu

Based on Kurdjumoiv-Sachs orientation relationship for the fee bee transformation in metals, the jirzal crystal orientation resulting from successive transformations of bee-fee-bee has been analyzed mathematically. There are 528 different variants; many of ther are crystallograpyically equirvalent. Specific examples show that, for equal probability of all the variants, the principal crystallographic axes [100 ], [110], and [111] of the initial bcc crystal can be transformed into vairous axes in the fina1 crystal However, fur each of these principal crystallographic axes, a continuous range of orientation within certain regions of the unit triangle is completely avoided by the finctl Crystals. For uses of higher indices, the final orientations are more uniformly distributed throughout the unit triangle. Results from the PI-esent analysis are in good agreement with preferred Oientations Observed in a zone-meltecl iron bar. THE allotropic forms of iron are characterized by the unusual fact that at both high and low temperatures a bcc structure is stable, whereas at intermediate temperatures (1400" to 910°C) the metal is fcc. Hence, during cooling from its melting temperature, iron undergoes successive phase transformations ofd—? —a with corresponding changes in the crystal structure of bcc — fcc -bcc. while numerous studies have been made in the past of the 1 — a transformation in iron and in various iron-base alloys, no information is available in the literature as to the mechanism of 6 — l transformation and the lattice orientation relationship between these two phases. Experimental difficulties have apparently prevented researchers from undertaking these studies. The laltice orientation relationship between the parent and the new phases of iron resulting from

Jan 1, 1965

By John Dilworth

IN considering the valuation of industrial properties in general, and of developed coal properties in par-ticular, it is assumed as fundamental that they have but one true value regardless of the object for which they are appraised. As regards developed coal lands, this value is only very approximately indicated by the recent sale price of neighboring lands, for the reason that it is rarely possible to find a sale of a coal property sufficiently similar in essential mining conditions to the one under consideration to serve as a measure of its value; and if such a one is found there are frequently incidental conditions peculiar to this particular transaction which invalidate the use of the sale price as a measure of general values. The true measure of the value of a coal mining opera-tion is the amount and rate of earnings it will afford with intelligent and experienced management. Prac-tically all of the features of a property which are gen-erally recognized as affecting its value relate either to the cost of producing the coal, or to the price it will bring, and so are intimately associated with earnings. In practice it is customary to appraise those portions of a developed coal property which are produced -by the industry of man-mine plant, equipment, development, town, etc.-at their cost of replacement at prevailing prices of materials, machinery, and labor, with such deductions for age, condition, obsolescence, and lack of usefulness as conditions warrant. Surface is appraised at the estimated cost of similar land in the district. Coal value is the difference between the worth of the entire property; considered as an industrial unit and

Jan 9, 1927

By Adolf Gurlt

It has long been known that minute quantities of foreign substances, when alloyed with steel, are capable of materially altering its physical properties. Thus, half a century ago, Faraday and Stodart, in England, discovered in the famous Indian steel, known as " wootz," small quantities of aluminum, from 0.0728 to 0.693 per cent., and attributed its extraordinarily good quality to the presence of such minute quantities of that metal. Since aluminum is now produced by electrolytic means on a large scale and at low cost, its addition to cast-steel has been frequently recommended of late. Chromium was alloyed with steel fifty years ago by the celebrated French metallurgist, Berthier, of Paris, and has recently been successfully applied to the same purpose by Holtzer, of Terre-Noire. In 1860 titanium was alloyed with crucible steel by Robert Mushet, of Coleford, the alloy containing up to 0.50 per cent. of titanium, which was extracted from Norwegian ilmenite. The titanium-steel was much vaunted by him for its excellent qualities. Rhodium, a very rare metal of the platinum series, was maintained by Berthier to improve steel materially in strength and hardness. Manganese has always been held by Sheffield steel-melters to provide steel with excellent qualities, and this influence was quite recently investigated by H. M. Howe and L. Campredon. Nickel was tried as an addition by Berthier, not to speak of gold, silver and platinum ; and nickel-steel has recently been brought into prominence by J. Riley and others, who recommend it for its great strength and toughness, particularly as material for armor-plates.

Jan 1, 1894

By J. M. Gaines, C. H. Herty

It is a matter of frequent record in the literature that manganese will desulfurize molten iron under proper conditions. Particularly has much been written with regard to this action in the mixer, and numerous reports have been published describing experiments in which advantage was taken of this phenomenon in order to obtain a purer iron for the open hearth. The question of sulfur elimination in the ladle has, however, received comparatively little attention. The reaction by which sulfur is removed is considered to be: FeS + Mn = MnS + Fe. The manganese sulfide, being but sparingly soluble in the iron, and of a lower density, will rise from the body of the metal and collect as a slag on the surface. It is therefore an action taking place solely in the metal, and independent of interaction between slag and metal. As will be shown later the presence of slag on the metal tends to offset the effect of manganese elimination. It is this fact which distinguishes desulfuriza-tion in the ladle from desulfurization in the mixer, for it has been shown1 that the amount of sulfur eliminated in the mixer is closely tied up with the composition of the slag. Experimental Procedure In order to ascertain the extent of and the factors controlling this elimination in the ladle, several casts were sampled carefully at the blast furnace and again when the ladles were being emptied, either at the mixer, open hearth, or foundry. If the sulfur content varied from ladle to ladle at the blast furnace the average sulfur content of each ladle was obtained by integrating the curve "sulfur vs. time " for the cast under

Jan 1, 1927

By G. E. McElroy

MUCH attention has been directed to mine-air flow in recent years, more especially in Great Britian where there is frequent reference to a theory of fluid flow developed by English engineers. Briefly stated, this theory is that for similar passages of the same relative roughness, in which fluid flow occurs, the conditions of flow are exactly the same for equal values of the product W D V/ µ, where W = density of the fluid, D = diameter of the passage through which flow occurs, V = mean velocity of flow, and µ = absolute viscosity of the fluid flowing. This, the "Reynolds Criterion" of fluid flow, had its origin in the work of Prof. Osborne Reynolds' more than 40 years ago. Later, Lord Rayleigh amplified the theory2 which has been conclusively proved for small pipes by the experiments of Stanton and Pannel3 over a large flow range, and by Lacey4 over a somewhat more limited range. Concordant results on small pipes have also been obtained by numerous other investigators with single fluids over more or less limited ranges of flow. According to this theory results in one medium, such as water, are immediately applicable to another, such as air; and experimental results on models are (theoretically, at least) applicable to full-scale designs. This is of great importance in aeronautics and can be of considerable value in mine ventilation research. Hodgson, in a recent paper,5 has outlined the application of this theory to mine-air flow and recent English experiments" on the resistance of a timbered mine airway have been expressed in this form.

Jan 10, 1926

By G. E. McElroy

MUCH attention has been directed to mine-air flow in recent years, more especially in Great Britian where there is frequent reference to a theory of fluid flow developed by English engineers. Briefly stated, this theory is that for similar passages of the same relative roughness, in which fluid flow occurs, the conditions of flow are exactly the same for equal values of the product W D V, where W = density of the fluid, D = diameter of the passage through which flow occurs, V = mean velocity of flow, and m = absolute viscosity of the fluid flowing. This, the "Reynolds Criterion" of fluid flow, had its origin in the work of Prof. Osborne Reynolds' more than 40 years ago. Later, Lord Rayleigh amplified the theory2 which has been conclusively proved for small pipes by the experiments of Stanton and Pannel3 over a large flow range, and by Lacey4 over a somewhat more limited range. Concordant results on small pipes have also been obtained by numerous other investigators with single fluids over more or less limited ranges of flow. According to this theory results in one medium, such as water, are immediately applicable to another, such as air; and experimental results on models are (theoretically, at least) applicable to full-scale designs. This is of great importance in aeronautics and can be of considerable value in mine ventilation research. Hodgson, in a recent paper,5 has outlined the application of this theory to mine-air flow and recent English experiments' on the resistance of a timbered mine airway have been expressed in this form.

Jan 10, 1926

By C. E. Beecher

THE application of gas or air under pressure to obtain more oil from a sand which has been practically exhausted by ordinary production methods has been practiced to a limited extent for many years. Until recently such methods were confined to the Eastern fields, principally those of Ohio and West Virginia, where in many cases the production obtained after applying pressure for a few years was nearly equal to the total production prior to that time which had been obtained by the usual production methods.' As early as 1917, J. 0. Lewis1 called attention to this method of increasing the recovery of oil and cited the phenomenal results obtained by H. E. Smith, I. L. Dunn and 0. C. Dunn, who pioneered the application of air or gas pressure recovery methods. With this information available it would appear that other oil-producing sections of the country have been extremely slow to realize the advantages of repressuring. However, after a few successful projects in the Mid-Continent area, the oil producers appreciated the value of this method for obtaining further and profitable production from their practically exhausted leases and are now making extensive use of it. In general, it has been the practice to apply pressure to the sands when production has declined to a small yield per well. The purpose of this paper is to discuss some of the advantages which may be expected from returning gas under pressure to the oil sands during the early stages of development, before the rock pressure has been dissipated and the gas exhausted, and to stimulate discussion of this subject on which comparatively little actual field data are available.

Jan 1, 1928

By Sylvain J. Pirson

The question of the interpretation of apparent resistivity curves is still a much disputed subject although the discussion has been going on for several years, mainly since Gish and Rooneyl made their first measurements on the Tidal Basin at Washington, D. C. As a first approximation, they interpreted the depth to a horizontal discontinuity in terms of the electrode spacing at which a maximum or a minimum occurs in the resistivity curve. Later on, Lancaster-Jones2 proposed a closer approximation of depth determination by evaluating the depth to a horizontal discontinuity as the two-thirds of the electrode spacing at which a point of inflection occurs in the resistivity curve. An accurate determination of the depth was recently proposed by Tagg3 for a two-layer problem. It is a graphic solution of the problem by means of charts calculated from the formula of the apparent resistivity based on the theory of electrical images. Tagg's method is theoretically sound but the fact that the layers have been assumed to be homogeneous and isotropic must not be overlooked. Abusive use of the method has been made by geologists who have failed to recognize the fact that nature offers only few cases where the conductivity of the rocks may be assumed to be the same parallel and perpendicular to the bedding plane. Actually the ratio of the two resistivities in those directions may take values ranging from one (isotropic medium) to three for shales. In such conditions Tagg's method leads to disappointments. A method recently advocated by Manhart4 and Tattam6 forces Tagg's method to give a solution where manifestly the case under

Jan 1, 1934

By S. P. Ray, B. D. Sharma

THE activation energy values for self-diffusion in pure metals have been correlated with a number of physical properties such as melting points,1 valences,' Debye temperatures,3 and cohesive energy densities.4 Extending the melting point correlation, the self-diffusion activation energy values for the alloys can be similarly correlated with the solidus temperatures. For metals and alloys which exhibit phase transformations, such a correlation is not feasible because of the uncertainty of various physical properties of the corresponding phases. Using thermodynamical approach, Ardell5 calculated the hypothetical melting points of the low melting phases of the polymorphic metals. However, these calculated melting points do not show reasonable correspondence with the activation energy of self-diffusion. Recently, a new approach treating metals and alloys as electron concentration phases has been developed by Engel6 and Brewer.7 These workers have attempted to correlate the crystal structures with the electron configurations of the atoms existing either in ground state or in an excited state of low promotion energy. The basic postulate of this theory is that whereas the contribution to the bonding of the metal comes from the interaction of both d and (s-p) electrons existing either independently or in hybridized states, the existing crystal structure is controlled by the (s-p) electrons alone. Specifically, a metal is supposed to crystallize in bcc, hcp, or fcc phase provided the metal has one, two, or three valence electrons per atom in the (s-p) configurations. The diamond, or ZnO and ZnS structures, occur with four (s-p) electrons per atom. Secondly, the contribution of d electrons to bonding is supposed to increase with atomic number

Jan 1, 1970

By V. H. Wilhelm

In contrast with the previous year's activity, the California oil industry for 1938 showed a decrease in drilling, market demand, and discovery of new oil reserves, although there was an increase in oil production. Although additions to reserves from new fields and extensions were less than withdrawals during the year, reappraisals of discoveries in 1937 added to new discoreries during 1938 amounted to over 300,000,000 bbl. The following comparative statement shows the important changes in various phases of the industry: Throughout the year the storage situation became progressively more acute, owing principally to less Pacific foreign demand, and increased potential from drilling the newly discovered fields and pools (Fig. 1). California storage increased approximately 32,000,000 bbl. during 1938, most of which (approximately 18,000,000 bbl.) was heavy crude and residuum. The market demand for the year was around 600,000 bbl. per day. Because of the trend toward Diesel power for heavy transportation, the non-gasoline-bearing crudes arc fast becoming a drug on the market. New discoveries were instrumental in increasing the potential production of the state from 1,076,000 bbl. per day in January to an all-time high of 1,420,000 bbl. per day at the close of the year; although the indicated reserves of these new discoveries were not equal to the yearly withdrawal of 249,000,000 bbl. As of the end of 1938, the state was voluntarily curtailed about 58 per cent. As a result of prospecting during the year, six new fields were discovered, three fields were extended, and deeper zones were reached in five of the older fields.

Jan 1, 1939

By H. K. Shearer

Oil production in north Louisianat in 1939 was 25,249,640 bbl., a decrease of 11.2 per cent from 1938. The only important increases in production were in the Cotton Valley and Shreveport fields, but Caddo, Homer, Sligo and Zwolle also made slight gains. Greatest decreases were in the Lisbon and Rodessa fields. Xatural gas production of 313,333 million cu. ft. was an increase of 5.6 per cent over 1938. The increase was accounted for in the Monroe field, while all other fields showed only minor variations from the production of the previous year. Well completions in 1939, as compared with 1938, were as follows: The decline in number of completions was due entirely to lack of proved areas for drilling, and would have been greater except for a revival of interest in the old Caddo shallow field. A majority of the wells completed during the year were in various old, shallow fields, so the average depth of drilling was much less than in several preceding years, notwithstanding a few very deep tests. No new fields were discovered, the only wildcat well reported as a producer being a very small oil well in northwestern De Soto Parish, which is of no apparent commercial importance. Deep gas-distillate production in the Cotton Valley formation was opened at Lake Bistineau and Lisbon, and oil at Shongaloo, but all these wells were too small to encourage additional drilling. Extensions and Developments Caddo Field.—More active drilling was donc in the 36-year old Caddo field in 1939 than in any of the newer fields, with completion of 133 oil

Jan 1, 1940

By R. A. David, D. J. Vink, D. L. Katz

A phase diagram showing boundary curve and quantity of liquid in the two-phase region was determined for a mixture of natural gas and natural gasoline in the region of its critical conditions. The temperatures and pressures of phase measurements were in the range of 85 to 212 F. and 1300 to 2600 Ib. per sq. in., respectively, with the critical conditions at 169.5 F. and 2615 Ib. per sq. in. abs. Color phenomena were observed in the region of the boundary curve from 102' to 192 F. Approximate densities of the single-phase and two-phase regions and analysis of the system are included. Boundary curves between the single-phase and the two-phase regions have been determined for several binary mixtures containing hydrocarbons. 2,3,4.6,7,10,11,12,14 These investigators did not report the relative amounts of liquid and vapor within the two-phase region. The equilibrium values obtained from the dew-point and bubble-point data can be used to compute the lines showing percentage of liquid on the pressure-temperature phase diagram8 but the positions of the lines near the critical temperature and pressure are uncertain. Relative amounts of vapor and liquid were obtained for a gasoline and a naphtha1 within the two-phase area but not in the region of the critical temperature and pressure. The bubble-point and dew-point lines, as well as the percentage liquid lines within the two-phase region, were determined by visual observations in glass apparatus. Apparatus An arrangement of the apparatus is given in Fig. 1, showing the Jerguson gauge A with glass windows B. Pressure was supplied by the

Jan 1, 1940

By K. L. Temple, A. R. Colmer

ACID coal mine drainage presents a peculiarly difficult problem for two principal reasons. First is the fact that the amount of acid water discharged from active and abandoned mines constantly increases as coal fields are developed and thereby creates a steadily worsening nuisance of rapidly growing importance to the general public as well as to the coal industry. Second is the even more significant fact that there is no method yet known that will appreciably alleviate the acid water problem except at totally prohibitive cost to the coal operators. The problem is thus seen to be an urgent one. With a growing need for good quality water and a growing public demand for abatemknt of stream pollution, a large portion of the soft coal industry finds itself in the position of year by year dumping more and more acid into the streams and waterways and having no way in sight of improving the situation or even of keeping it from getting worse. While some studies have been made, it is only in the last few years that the problem has been seriously considered, chiefly by the group of workers under the direction of S. A. Braley at Mellon Institute and by the Bituminous Coal Research, Inc. fellowship at West Virginia University. Hinkle and Koehlerl reported the results of the earlier West Virginia work. This work pointed to certain biological aspects which had not been noticed previously. These may be summarized as two separate findings. One was that sulphur oxidizing bacteria were present in acid mine water and that their possible role in contributing to the acidity should be investigated. The other was

Jan 1, 1952

By Spencer Cragoe

I have read with much interest the elaborate and able paper of Messrs. Granger and Treville on the Mining Districts of Colombia, presented at the Atlantic City Meeting (ante, p. 33). Going into detail, however, as the paper does—and particularly with reference to the department of Antioquia, I am somewhat surprised that the property of the Frontino and Bolivia Company, probably one of the richest and most extensive in Colombia, should come off with such scant notice. The entire property embraces an area of some 28 square miles, and is situated at a distance of about 2 leagues from Remedios—after Medellin probably the most important town of the Department—and lying in approximately '7° N. latitude. The neighborhood of Remedios has been long celebrated for its production of the precious metal. Alluvial gold in large quantities has been obtained from the vicinity for upwards of two centuries; and even to-day a large proportion of the population finds a comfortable livelihood, during the dry season, in washing the sands of various rivers, notably the Rio Porce; while the amount of gold, in the form of nuggets, brought almost daily to Remedios and other points, from streams in the immediate neighborhood, is astonishing. These nuggets vary much in size. The majority, of course, are small, but larger ones are by no means scarce. I have been considerably surprised at the amount and value of the trade thus transacted between natives and merchants of the various towns. The property owned by the Frontino and Bolivia Company has been, I believe, for the larger part of the present century,

Jan 1, 1899

By V. H. Wilhelm

In contrast with the previous year's activity, the California oil industry for 1938 showed a decrease in drilling, market demand, and discovery of new oil reserves, although there was an increase in oil production. Although additions to reserves from new fields and extensions were less than withdrawals during the year, reappraisals of discoveries in 1937 added to new discoreries during 1938 amounted to over 300,000,000 bbl. The following comparative statement shows the important changes in various phases of the industry: Throughout the year the storage situation became progressively more acute, owing principally to less Pacific foreign demand, and increased potential from drilling the newly discovered fields and pools (Fig. 1). California storage increased approximately 32,000,000 bbl. during 1938, most of which (approximately 18,000,000 bbl.) was heavy crude and residuum. The market demand for the year was around 600,000 bbl. per day. Because of the trend toward Diesel power for heavy transportation, the non-gasoline-bearing crudes arc fast becoming a drug on the market. New discoveries were instrumental in increasing the potential production of the state from 1,076,000 bbl. per day in January to an all-time high of 1,420,000 bbl. per day at the close of the year; although the indicated reserves of these new discoveries were not equal to the yearly withdrawal of 249,000,000 bbl. As of the end of 1938, the state was voluntarily curtailed about 58 per cent. As a result of prospecting during the year, six new fields were discovered, three fields were extended, and deeper zones were reached in five of the older fields.

Jan 1, 1939

REJUVENATED is an apt word to apply to Chino, Kennecott's big open-pit mine at Santa Rita, New Mexico. Back in 1923 Chino was merged with Ray by an exchange of shares, and in 1926 the Ray-Chino combination was taken over by Nevada Consolidated through an issue of bonds that were traded for the Ray and Chino assets. Subsequently, of course, the whole package was acquired by the Kennecott Copper Corporation. On the basis of the terms of the Ray-Chino-Nevada exchanges, Chino was rated third in value, something less than thirty per cent of the total. In 1955 the appraisal would doubtless be forty per cent or more. But it is not only vis-a-vis Ray and Nevada that Chino has blossomed out. At the end of 1931, Chino ranked seventh among the Porphyries in point of output; whereas by the end of 1954 it was fifth,. having passed both Inspiration and Nevada Consolidated. Sharp curtailment in production in 1932-33-34 and total suspension in the two years following (see Fig. 21) found the property in a somewhat parlous position. However, the engineers had not been idle; they had been planning for the future, and in 1937 a far-reaching program of rejuvenation was launched. During the ensuing five years, capital expenditures totaled more than $8,500,000. Among the projects undertaken were the following: (1) Mine-Purchase of larger and better equipment for drilling, loading, and transporting the ore. (2) Mine-Beginning of the first systematic project to leach and recover copper in the waste dumps at the mine.

Jan 1, 1957

By H. K. Shearer

Oil production in north Louisianat in 1939 was 25,249,640 bbl., a decrease of 11.2 per cent from 1938. The only important increases in production were in the Cotton Valley and Shreveport fields, but Caddo, Homer, Sligo and Zwolle also made slight gains. Greatest decreases were in the Lisbon and Rodessa fields. Xatural gas production of 313,333 million cu. ft. was an increase of 5.6 per cent over 1938. The increase was accounted for in the Monroe field, while all other fields showed only minor variations from the production of the previous year. Well completions in 1939, as compared with 1938, were as follows: The decline in number of completions was due entirely to lack of proved areas for drilling, and would have been greater except for a revival of interest in the old Caddo shallow field. A majority of the wells completed during the year were in various old, shallow fields, so the average depth of drilling was much less than in several preceding years, notwithstanding a few very deep tests. No new fields were discovered, the only wildcat well reported as a producer being a very small oil well in northwestern De Soto Parish, which is of no apparent commercial importance. Deep gas-distillate production in the Cotton Valley formation was opened at Lake Bistineau and Lisbon, and oil at Shongaloo, but all these wells were too small to encourage additional drilling. Extensions and Developments Caddo Field.—More active drilling was donc in the 36-year old Caddo field in 1939 than in any of the newer fields, with completion of 133 oil

Jan 1, 1940

By R. A. David, D. L. Katz, D. J. Vink

A phase diagram showing boundary curve and quantity of liquid in the two-phase region was determined for a mixture of natural gas and natural gasoline in the region of its critical conditions. The temperatures and pressures of phase measurements were in the range of 85 to 212 F. and 1300 to 2600 Ib. per sq. in., respectively, with the critical conditions at 169.5 F. and 2615 Ib. per sq. in. abs. Color phenomena were observed in the region of the boundary curve from 102' to 192 F. Approximate densities of the single-phase and two-phase regions and analysis of the system are included. Boundary curves between the single-phase and the two-phase regions have been determined for several binary mixtures containing hydrocarbons. 2,3,4.6,7,10,11,12,14 These investigators did not report the relative amounts of liquid and vapor within the two-phase region. The equilibrium values obtained from the dew-point and bubble-point data can be used to compute the lines showing percentage of liquid on the pressure-temperature phase diagram8 but the positions of the lines near the critical temperature and pressure are uncertain. Relative amounts of vapor and liquid were obtained for a gasoline and a naphtha1 within the two-phase area but not in the region of the critical temperature and pressure. The bubble-point and dew-point lines, as well as the percentage liquid lines within the two-phase region, were determined by visual observations in glass apparatus. Apparatus An arrangement of the apparatus is given in Fig. 1, showing the Jerguson gauge A with glass windows B. Pressure was supplied by the

Jan 1, 1940

By Joseph Jensen

FROM Aug. 31, 1937, until Apr. 30, 1939, there were 40,872,610 bbl. of oil run to storage in California; from Apr. 30, 1939, to Aug. 31 of the same year 5,512,912 bbl. were withdrawn from storage. But from Aug. 31, 1937, to Aug. 31, 1939, the number of producing wells in the state has increased from 17,706, with a potential production of 1,323,202 bbl., to 18,910, with a potential of 2,302,282 bbl. Thus, in a period of two years, during the first 20 months stocks increased over 1/3 and during the following four months stocks decreased 1/30. In the same two years the number of productive wells increased 1/15 and potential increased 3/4. Undoubtedly, the large increase in stocks created the pressure that caused the reduction in stocks that followed; yet this has come about in spite of the larger number of wells and higher potential. Cause of the change was the adoption on May 17, 1939, by the Central Committee of California Oil Producers of a uniform method of oil curtail-ment for all wells throughout the state. Acceptance of the method in the four months following adoption by practically all fields in California indicates that producers generally are convinced of its merit and fairness. True, some operators still overproduce, but the restraint practiced by the remainder of the industry has been sufficient to turn a situation headed for chaos into one of reasonable stability. Credit for this change goes to the industry itself, because it has all been accomplished under voluntary oil curtailment.

Jan 1, 1940

INTRODUCTION The after-tax rate of return that properly discounts future cash flows is usually referred to as the "discounted cash flow-rate of return" (DCF-ROR). The method is also referred to as the internal rate of return, true rate of return, and investor's rate of return in some literature. According to Stermole (1974, p. 188) industry polls indicate that the DCF- ROR method is the number one economic evaluation decision method used by more than 90% of the industrial companies that use for- mal economic evaluation procedures. Other economic evaluation methods that have been used in the past, such as payback period, accounting ROR, etc., have largely given way to DCF-ROR analysis because they fail to account properly for the time value of money. DCF-ROR is generally defined as that rate of return that makes the present worth of future generated cash flow over the life of the project (including after tax salvage value) equal to the present worth of all after-tax investments. The "present worthing" of future cash flow involves discounting future cash flow to a present value according to the mathematics of compound interest at some interest rate. The determination of the interest rate that equates the present worth of future after-tax earnings with the present worth of all after-tax investments necessary to create such earnings is properly called the discounted cash flow rate of return analysis. Although present worth calculations are usually used for determining the DCF-ROR, the same results can be obtained by comparing income and costs of any equivalent point in time, i.e., future worth, etc.

Jan 1, 1980