Short Course on Project Economic Evaluation and Financial Modelling

Attendance

On-Site

Posted on

Start Date

End Date

Type

Professional training

Fees

Regular fees: 1150 - 1350 EUR

Very often, a technically excellent project dies prior to being implemented. The reason for this is usually that the engineer who had proposed the project was not capable of explaining its financial benefits. How does a project (be it a manufacturing line, a power plant, the security protection of a shipping centre or whatever) come to life? Firstly, the technical side has to be developed - which is the engineer’s task. Once this is achieved, the project is ready to be implemented. The key decision-makers in this final stage are almost always economists. If the engineer fails to explain why the project is economically advantageous it will not be approved.

Hence, a project developer also has to be able to demonstrate the financial feasibility of the engineering work, i.e. presenting key indicators like ROI, specific costs, IRR etc. as well as a financial risk evaluation.

The participants of this course will learn how to perform these calculations. The lecturer will use a step-by-step approach, not only covering the right methods and calculations but also overcoming one of biggest problems an engineer has - how, and from where, do I get the data required for carrying out the economic analysis? There are numerous hands-on exercises of real projects with a focus on energy, environment protection, safety and security. The course will also enable the participant to work out banking papers for the funding.

Target Audience

This training course is aimed at all those who want to demonstrate and prove that the implementation of a good technical project is also financially advantageous. Who should attend:

  • Engineers of all disciplines
  • Scientists, researchers
  • Developers of technical projects
  • Specialists for new technologies
  • Government and trans-national executives dedicated to implementing technical projects
  • Developers of technical projects
  • Technical executives and managers of industrial enterprises
  • Policymakers
  • Students
  • Professionals interested in the economic viability of technical projects

Course Programme

The training course consists of two main components: (a) lectures on the various topics with illustrative, exemplary calculations and (b) the respective associated and matching hands-on exercises for the participants. All documents required for performing economic calculations (spreadsheets, list of formulas, working tables, etc.) will be provided. The following topics are covered:

Day 1 - Tuesday 9th November 2021

  • Basics of economic calculations: Financing of projects, different types of loans, the impact of bank interest rate, the role of inflation in project financing. Approximation to simplify the calculation.
  • Cost side of a project. How a financial calculation is carried out, cost items of a project, considering the cost side of a project, year by year cost items, each year over full-service life. The three cost components of a project. How to facilitate the calculation.
  • Cost comparison calculation: Total annual costs, how to compare projects under cost aspects. Cost annuity. Determination of specific costs, comparing different projects using this indicator.
  • Investment costs: What is part of investment cost, what is not? Wear and tear, depreciation, approximation. The service life of a project, technical and economic lifetime, liquidation yield.

Day 2 - Wednesday 10th November 2021

  • Incomes and returns: Types of income items, side incomes, avoided costs, subsidies. Definition of returns, static payback period, Return on Investment (ROI), evaluating the result of the calcu¬lated payback period and ROI.
  • Database for financial calculation of a project: How to collect data, the formation of a database, what if data is missing or hard to obtain. Net profit of a project. Comprehensive case study.
  • Dynamic methods: Difference between static and dynamic methods, discounting, the significance of the discounting factor. Static and dynamic payback period. The practicality of dynamic calculations.
  • Net Present Value (NPV): Net value and Net Present Value. Definition of NPV, approximation of calculation, Present Value factor, recovery factor, Annuity. Evaluating the NPV of a project.

Day 3 - Thursday 11th November 2021

  • Comparison of projects under financial aspects: Steps to develop projects, how to compare and evaluate the financial side of different projects solving the same problem. Examples.
  • Internal Rate of Return (IRR): Definition, significance of IRR, approximation to calculate IRR. Why IRR is an excellent indicator. Evaluating the calculated IRR of a project.
  • Financial risk assessment of a project: Types of risk, sensitivity analysis, how to proceed, the definition of critical values, what if the risk is assessed as very high, measures to reduce risk. Banking papers, the practicality of financial risk assessment.
  • Summary and discussion: Technical and economic side of a project, how to develop the very best project. Real case problems, joint discussion. Suggestions for day to day work.

More Information

Posted on

Start Date

End Date

Type

Professional training

Fees

Regular fees: 1150 - 1350 EUR

Ashurst%20Lodge%2C%20Ashurst%2C%20Southampton%2C%20United%20Kingdom

Ashurst Lodge, Ashurst

SO40 7AA Southampton , United Kingdom