Course

Unit 1

Engineering economics : Basic principles – Time value of money, Quantifying alternatives for decision making, Cash flow diagrams, Equivalence- Single payment in the future (P/F, F/P), Present payment compared to uniform series payments (P/A, A/P), Future payment compared to uniform series payments (F/A, A/F), Arithmetic gradient, Geometric gradient. Funds: cash flow, sources of funds; Histograms and S-Curves. Earned Value.

Unit 2

Comparison of alternatives: Present, future and annual worth method of comparing alternatives, Rate of return, Incremental rate of return, Break-even comparisons, Capitalized cost analysis, Benefit-cost analysis.

Depreciation, Inflation and Taxes

Equipment economics: Equipment costs, Ownership and operating costs, Buy/Rent/Lease options, Replacement analysis.

Unit 3

Cost estimating: Types of Estimates, Approximate estimates – Unit estimate, Factor estimate, Cost indexes, Parametric estimate, Life cycle cost.

Financial management: Construction accounting, Chart of Accounts, Financial statements – Profit and loss, Balance sheets, Financial ratios, Working capital management.

Course Objective

To expose the students to the concepts of construction finance such as comparing alternatives proposals, evaluating alternative investments, cost estimating and management of accounting.

Course Outcome

CO1: Apply time-value of money concept to compare alternatives

CO2: Analyse equipment cost and replacement alternatives.

CO3: Prepare different types of cost estimates

CO4: Understand the financial management procedures and estimate the financial ratios

CO-PO Mapping

Text book(s)

Bose, D. C., “Fundamentals of Financial management”, 2nd ed., PHI, New Delhi, 2011.

Prasanna Chandra, “Projects: Planning, Analysis, Selection, Financing, Implementation and Review”, McGraw- Hill Education, 2019.

Reference(s)

Gould, F. E., “Managing the Construction Process”, 4^th ed., Pearson Education, 2012.

Harris, F. , McCaffer, R. and Edum-Fotwe, F., “Modern Construction Management”, 6th ed., Wiley India, New Delhi, 2012.

Jha, K. N., “Construction Project Management, Theory and Practice”, Pearson, New Delhi, 2015. Peurifoy, R. L. and Oberlender, G. D., “Estimating Construction Costs”, 6th ed., McGraw-Hill, 2015.