Economic Evaluation of Investment

In: Business and Management

Submitted By Femonugae
Words 3364
Pages 14


MATRIC NO: PG14/05/005
JUNE 2015




The conceptual phase of capital projects is of strategic importance – an economic evaluation at this early stage is critical to the owners’ decision-making with limited information. The current study developed a comprehensive but practical system that can be used in such an early phase for economic evaluation of capital building construction projects.

The system integrates four analytical steps:

(i) Project planning, (ii) Construction costs estimation, (iii) Projection of incomes and expenditures and; (iv) Economic evaluation.

Due to the integration, the system effectively manages the information flow from the planning to the evaluation, in which any changes from the initial plan are fully accounted for multiple alternates. In the system, users predict construction cost using a combined estimating method with historical project data and assembly costs.

The system performs the tabulation of all incomes and expenditures based on the automated calculation as well as users’ inputs and then the economic evaluation based on project cash flow, which is generated using an automated scheduling method. System performance has been tested in terms of its accuracy and efficiency through case study.


Economic evaluation of facility investment is one of the most critical tasks in the conceptual phase since it involves a commitment of resources spending when a decision is made.

The evaluation involves forecasting cash flow considering all capital requirements and revenues. An economic evaluation should…...

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