d disadvantages. Sharing resources would normally imply cost benefits. Regarding QoS the remote access is a drawback, also for the security, but the possibility to provide alternative remote accesses as back-up will instead have a positive impact. Obviously the service-oriented architecture can solve many network architecture problems, when using service resources on demand across the network. This is an interesting area for network architects and designers. Among the main challenges are no doubt the QoS and security issues. Appendix 2 Financial Calculations FINANCIAL CALCULATIONS AND INVESTMENT ANALYSIS Important financial terms and a tool for operators to decide if a business concept is profitable in the future. SCOPE The main purpose of this appendix is to explain some common financial terms and tools, used to assist an operator/service provider in making good investment decisions. Such tools and terms are case studies, cost/benefit studies, discounted cash flow studies, net present value and internal rate of return calculations. Further, the corporate policy should not be overlooked in this context. Operator business case development Operating expense Revenue Financial calculations Capital expenditures Tools Figure A2.1 Operators business case development Understanding Changing Telecommunications - Building a Successful Telecom Business. Edited by A. Olsson © 2004 John Wiley & Sons, Ltd ISBN: 0-470-86851-1 Understanding Changing Telecommunications - Building a Successful Telecom Business Other related subjects are business accounting, business profitability and performance, and finally business risks. The appendix constitutes the final step in the operator business case development oth- erwise covered in Chapter 4. See Figure A2.1. BASIC TERMINOLOGY REVENUE, COST AND PROFIT Other basic terms are income statement and profit and loss account. Let us consider a traditional operator. See Figure A2.2. In the middle of the figure is the service producing machine, the network. According to Section 4.7 on cost effici