Imagine a World Without Plant!
Construction Management - II / Basics of Engineering Economics
Performance:Slide501.doc
Engineering Economics
Principles
§ During our examinations we assume a consolidated economy. ( Free of extremities, such as war, hyperinflation, corruption, etc., and fundamentally operated by pure market mechanisms and by stabil legal and regulations’ systems )
§ Our examinations are aiming at economic comparisions of functionally equivalent technical and/or financial options. Figures resulted by any analysis of any option can not be evaluated as themselves but as values to be measured against others.
§ Conclusions of our examinations are at most supporting decision makers at their work when elaborating their market policy and/or strategy, but are not substituting any decisions to be made by them.
BUTE DCTM / Engineering Programs in English / 2000-
Dr. Zoltán András Vattai
Construction Management - II / Basics of Engineering Economics
Performance:Slide502.doc
Using External Resources
Foreign Capital
Due to the fact that a typical investment in civil engineering and/or in construction industry moves huge amount of technical and financial resources, it is frequently unavoidable to invoke external („foreign”) resources and/or capital temporarily.
Liquidity:
Promp available own economic resources.
(„self-financing capability”)
Loan:
External economic resource temporarily let for use and to be paid back later increased by some extra fee („foreign capital”, „loan capital”). Interest:
„Rent” („price”) of using foreign capital.
Its extent is highly defined by the actual
„demand versus supply” conditions.
BUTE DCTM / Engineering Programs in English / 2000-
Dr. Zoltán András Vattai
Construction Management - II / Basics of Engineering Economics
Performance:Slide503.doc
Using External Resources
Foreign Capital
Term / Pay-Back Period / Lending Period:
A time period in which a foreign capital is let for use. By the end of it the capital itself and the interest on it must be
Performance:Slide501.doc
Engineering Economics
Principles
§ During our examinations we assume a consolidated economy. ( Free of extremities, such as war, hyperinflation, corruption, etc., and fundamentally operated by pure market mechanisms and by stabil legal and regulations’ systems )
§ Our examinations are aiming at economic comparisions of functionally equivalent technical and/or financial options. Figures resulted by any analysis of any option can not be evaluated as themselves but as values to be measured against others.
§ Conclusions of our examinations are at most supporting decision makers at their work when elaborating their market policy and/or strategy, but are not substituting any decisions to be made by them.
BUTE DCTM / Engineering Programs in English / 2000-
Dr. Zoltán András Vattai
Construction Management - II / Basics of Engineering Economics
Performance:Slide502.doc
Using External Resources
Foreign Capital
Due to the fact that a typical investment in civil engineering and/or in construction industry moves huge amount of technical and financial resources, it is frequently unavoidable to invoke external („foreign”) resources and/or capital temporarily.
Liquidity:
Promp available own economic resources.
(„self-financing capability”)
Loan:
External economic resource temporarily let for use and to be paid back later increased by some extra fee („foreign capital”, „loan capital”). Interest:
„Rent” („price”) of using foreign capital.
Its extent is highly defined by the actual
„demand versus supply” conditions.
BUTE DCTM / Engineering Programs in English / 2000-
Dr. Zoltán András Vattai
Construction Management - II / Basics of Engineering Economics
Performance:Slide503.doc
Using External Resources
Foreign Capital
Term / Pay-Back Period / Lending Period:
A time period in which a foreign capital is let for use. By the end of it the capital itself and the interest on it must be