Circular-oriented economic assessment of innovations using digital twin technology for an aircraft hydraulic system

Authors

DOI:

https://doi.org/10.15587/2706-5448.2025.347822

Keywords:

circular economy, investment attractiveness, capital-intensive innovations, financial sustainability of innovations, strategic investment

Abstract

The object of this research is the set of processes involved in the economic evaluation of innovative technologies under circular-economy conditions. The subject concerns the methods and models used to assess their economic efficiency. This is illustrated through the digital twin of an aircraft hydraulic system. The research substantiates a system of techno-economic indicators for evaluating an innovative technology. It also prepares the initial scenario data needed for modelling its development under different levels of circular-practice implementation. Three scenarios – pessimistic, baseline, and optimistic – are modelled. This is followed by an analysis of cash flows and discounted efficiency indicators (NCF, payback period, NPV, IRR, PI) and a comparative assessment of techno-environmental parameters. The sensitivity of the results was analysed using the derivative-based method to determine the influence of the key factors.

The modelling of indicators with circular practices showed that even in the pessimistic scenario the technology project is still attractive for investments. For example, when CAPEX = 1.59 million USD, the project makes NCF = 808.7 thousand USD. The efficiency indicators (NPV = 2.34 million USD, IRR = 42%, PI = 2.47) confirmed that the project is good to do. The baseline and optimistic scenarios demonstrated that NPV can reach 2.75–2.95 million USD, IRR can be 43–48%, and PI can be 2.59–3.10. In this situation, the payback period becomes almost 1.57 years. Using circularity factors makes the discounted cumulative cash flow positive from year 2–3. Without circularity, it becomes positive only at the end of year 3.

The sensitivity analysis proved how strong the circularity influence is. When NCF goes down by 20%, NPV becomes 1.35 million USD and IRR becomes 25%. When NCF goes up by 20%, NPV grows to 4.15 million USD and IRR grows to 56%.

An analysis of NPV derivatives was also done. The results showed that the marginal effect of early cash flows is almost two times bigger than the effect of later cash flows, with the CAPEX gradient being negative (–1). This allowed to say that fast income creation is very important in the early stages of the project.

Author Biographies

Viktoriia Prokhorova, V. N. Karazin Kharkiv National University

Doctor of Economic Sciences, Professor, Head of Department

Department of Economics and Management

Oleksandra Mrykhina, Lviv Polytechnic National University

Doctor of Economic Sciences, Professor

Department of Business Economics and Investment

Orest Koleshchuk, Lviv Polytechnic National University

Doctor of Economic Sciences, Associate Professor

Department of Business Economics and Investment

Krystyna Slastianykova, V. N. Karazin Kharkiv National University

Assistant

Department of Economics and Business Administration

Roman Paraniuk, V. N. Karazin Kharkiv National University

PhD Student

Department of Economics and Business Administration

Darii Koleshchuk, Lviv Polytechnic National University

Department of Foreign Trade and Customs

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Circular-oriented economic assessment of innovations using digital twin technology for an aircraft hydraulic system

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Published

2025-12-29

How to Cite

Prokhorova, V., Mrykhina, O., Koleshchuk, O., Slastianykova, K., Paraniuk, R., & Koleshchuk, D. (2025). Circular-oriented economic assessment of innovations using digital twin technology for an aircraft hydraulic system. Technology Audit and Production Reserves, 6(4(86), 31–45. https://doi.org/10.15587/2706-5448.2025.347822

Issue

Vol. 6 No. 4(86) (2025): Economics of enterprises. Macroeconomics

Section

Economic Cybernetics

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Copyright (c) 2025 Viktoriia Prokhorova, Oleksandra Mrykhina, Orest Koleshchuk, Krystyna Slastianykova, Roman Paraniuk, Darii Koleshchuk

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