With flair and an originality of approach, Crundwell brings his considerable experience to bear on this crucial topic. Uniquely, this book discusses the technical and financial aspects of decision-making in engineering and demonstrates these through case studies. It's a hugely important matter as, of course, engineering solutions and financial decisions are intimately tied together. The best engineers combine the technical and financial cases in determining new solutions to opportunities, challenges and problems. To get your project approved, no matter the size of it, the financial case must be clear and compelling. This book provides a framework for engineers and scientists to undertake financial evaluations and assessments of engineering or production projects.
Pt. I Foundations
1 An Overview of the Evaluation and Financing of Capital Projects 3
2 The Theory and Practice of Decision-making Concerning Capital Projects 19
3 Financial Statements 45
4 Cash Flows for a Project 91
Pt. II Evaluation of Capital Projects
5 Time Value of Money 125
6 Evaluation Criteria for Investment Decisions 163
7 Mutually Exclusive, Replacement and Independent Projects 205
8 Practical Issues in the Evaluation of Projects 247
9 Sensitivity, Scenario and Other Decision Analysis Techniques 273
10 Case Studies on the Application of the Decision-making Criteria 291
Pt. III Risk Assessment
11 Risk and Return 337
12 Cost of Capital 367
13 Risk in Engineering Projects 391
14 Decision Tree Analysis and Utility Theory 427
15 Real Options Analysis 457
Pt. IV Financing of Capital Projects
16 Sources of Finance 507
17 Financing Engineering Projects 531
App. A Equivalent US and UK Terms Used in the Financial Statements 559
App. B Answers to Selected Exercises 561
Glossary 595
Bibliography 601