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Using activity-based costing to evaluate capital investments for green manufacturing systems |
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| Authors: | Wen-Hsien Tsai Hui-Chiao Chen Jau-Yang Liu Shu-Ping Chen Yu-Shan Shen |
| Affiliation: | 1. Department of Business Administration , National Central University , Jhongli, Taoyuan 32001, Taiwan whtsai@mgt.ncu.edu.tw;3. Department of Business Administration , National Central University , Jhongli, Taoyuan 32001, Taiwan;4. Department of Accounting , Chinese Culture University , Yang-Ming-Shan, Taipei 11192, Taiwan |
| Abstract: | The purpose of this study is to assess how an activity-based costing (ABC) system can assist the justification of capital investments for green manufacturing systems (GMSs). We provide an investment decision model and a numerical example for the justification of GMS based on the ABC system to include not only the direct performances but also the intangible benefits that are generated by the adoption of GMS. Our findings provide insight into the value of capital investments for a GMS based ABC system and demonstrate the opportunity to reduce pollution while simultaneously improving the value of investment. |
| Keywords: | environmental management activity-based costing (ABC) green manufacturing system (GMS) capital investments net present value (NPV) |