S-Space College of Engineering/Engineering Practice School (공과대학/대학원) Dept. of Architecture and Architectural Engineering (건축학과) Journal Papers (저널논문_건축학과)
EVALUATION METHODS FOR CONSTRUCTION PROJECTS
- Issue Date
- VILNIUS GEDIMINAS TECH UNIV
- JOURNAL OF CIVIL ENGINEERING AND MANAGEMENT; Vol.15, No.4, pp.349-359
- Financial evaluation methods such as Net Present Value (NPV) and Internal Rate of Return (IRR) are not fully adequate for accounting three practical aspects of construction projects: reinvestment rate, actual amount of required investment, and firm available funds. In a certain type of projects, this inadequacy often results in the inapplicability of NPV, multiple or no IRR problem, systematic bias of IRR, and inconsistent decision signal and ranking between NPV and IRR. Many modified methods have been developed, but hardly succeeded in reflecting construction market reality in an integrated manner. To address this issue, Project Present Value, Project Rate of Return, and Firm Rate of Return are proposed together with an investment decision framework. The proposed methods are designed to be free from all those problems, while incorporating market reality in them. As a result, construction practitioners would have more reliable and economically meaningful decision tools, which lead to the success of their projects.
- Files in This Item: There are no files associated with this item.