This article presents an alternative approach to the economical assessment and optimization of radial power distribution feeders with concentrated and/or distributed loading. It takes into account the annual cost items resulting from the feeder copper losses as well as the installation of shunt capacitors. In addition to the energy and capacitor specific costs, the objective function is shown to depend on the size and location of the shunt capacitor, the feeder resistance, the voltage level, as well as the load current and its power factor. The concept is applied to a case study, and the results are compared with the known solutions based on minimizing the feeder losses. An overall economical advantage is achieved if the presented procedure is applied.