Net Present Value, Internal rate of return and payback period are common and very useful rules for determining the value of a project. New engineers are expected to determine an accurate value of a project as they begin their career. They can struggle with the amount of detailed information that is required to determine an accurate value of a project. The paper shows the challenges that new engineers face when determining a capital budget and how to alleviate those challenges. In this paper a structured interview style approach is used to gather information and then a value of the project is determined. The complex nature of calculating a project’s NPV is broken down into simple variables. The required calculations are then completed automatically using Microsoft Excel. This paper describes this process in detail. These findings indicate that this approach can help engineering students learn the foundation of engineering economics and provide better estimation for a project’s value. A project’s NPV, IRR and payback period are calculated using an interview style approach.
|Advisor:||Chen, Xin, Bharati, Rakesh|
|School:||Southern Illinois University at Edwardsville|
|School Location:||United States -- Illinois|
|Source:||MAI 81/6(E), Masters Abstracts International|
|Keywords:||Capital budget, Interview approach, NPV, Payback period|
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