The MAPI method—Its effects on productivity: An alternative is needed

This paper examines the question of whether “cookbook” methods of equipment replacement and capital investment analysis have had an adverse effect on productivity. The MAPI method is scrupulously examined for this purpose. It is shown that MAPI is constructed around some rather binding assumptions that cannot be considered as valid in today's economic environment. A more traditional approach is advocated in this paper that will provide more accurate and reliable measures than MAPI. The proposed method requires that economic service lives be determined for all alternatives and an Annual Worth (AW) analysis be performed on each competing project's aftertax cash flow.