MPM502: Project Cost Analysis and Appraisal for Bridge Replacement

This project report undertakes a comprehensive cost analysis and appraisal for a bridge replacement initiative. It begins with a detailed project charter, outlining project justification, description, high-level requirements, risks, and budget estimations, including funding sources and stakeholder role...Read More

Running head: PROJECT COST ANALYSIS & APPRAISAL
MPM502 Project Cost Analysis & Appraisal
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1PROJECT COST ANALYSIS & APPRAISAL
Table of Contents
1. Project Charter.............................................................................................................................2
2. Project Scope Statement..............................................................................................................9
3. Schedule for the project.............................................................................................................13
4. Costing for the project...............................................................................................................19
4.1 Approaches used for project cost estimation.......................................................................23
5. Budget of the project.................................................................................................................24
6. Appraisal of the project.............................................................................................................25
7. Risk management for the project...............................................................................................31
8. Conclusion.................................................................................................................................32
References......................................................................................................................................35

2PROJECT COST ANALYSIS & APPRAISAL
1. Project Charter
PROJECT CHARTER
Project Title: Replacement of existing bridge
Project Sponsor: Gail Stephens Date Prepared: August 31, 2017
Project Manager: Mike Lai Project Customer: Malaysian City Council
Project Purpose or Justification:
The focus of this project is on an extension which is most established existing intersection of the
Hawkesbury River. The bridge was initially worked with a timber deck on cast press wharfs in
1875. Throughout the years the bridge has experienced numerous adjustments including raising
the extension by 2.4 meters and including a dock in 1897. The timber deck, projection and a
similar dock were supplanted by strengthened cement in 1920 and a trail was included the
downstream side in 1968. The bridge is 143 meters in length and 6.1 meters wide. It conveys a
normal of 18,000 vehicles for every day. While the structure of the current Bridge is as yet viewed
as safe for general movement, parts of the current bridge are presently 137 years of age. A few
examinations have been carried on state of the current bridge and the choices to restore or
supplant the extension. Henceforth, this task has been attempted after distinguishing proof that the
favored alternative is for substitution of the Bridge. The favored alternative is an abnormal state
connect, 35 meters downstream of the current bridge.

3PROJECT COST ANALYSIS & APPRAISAL
Project Description:
This project is aimed at replacing an existing bridge so as to ensure safety and infrastructure
development. This report gives a synopsis of the issues brought up in composed entries,
workshops, online gathering remarks and exchanges amid this period. A sum of 72 entries were
gotten between August 2011 and September 2011. Issues raised will be considered amid readiness
of the ecological effect articulation and the idea outline. While this report does not react in detail
to each issue raised, it includes data on how certain issues will be tended to amid arrangement of
the natural effect articulation and improvement of the idea plan.
High-Level Requirements:
The point of the project is to give a sheltered and solid intersection of the River.
Targets of the project are to:
 Improve security for drivers, walkers and cyclists.
 Improve movement and transport proficiency.
 Improve the level of surge insusceptibility.
 Meet long term group needs.
 Minimize the effect on legacy and the character of the neighborhood.
 Be a financially savvy and a moderate result.

4PROJECT COST ANALYSIS & APPRAISAL
High-Level Risks:
The risks and concerns that have been identified in context to this project are listed as below:
 Potential effects on the legacy and character of the neighborhood.
 Nearby people group needs, for example, person on foot and cyclist associations and
recreational spaces.
 Expanded commotion and contamination.
 Potential loss of business in the town focus.
 Activity and transport issues.
 Wellbeing for drivers and walkers drawing closer and intersection the bridge.
 The level of surge insurance that would be given.
 The cost viability of the new bridge.
For this task, there are a few noteworthy risks that could conceivably significantly affect spending
plan or potentially plan. Some can be straightforwardly controlled or impacted by the task group,
while some are not and rely upon economic situations. Steel speaks to a noteworthy bit of the
extension material and cost (roughly 40% of development cost) and is affected by advertise
request. It will be imperative to utilize the alleviation systems illustrated beneath to help decrease
chance.
 Steel costs are influenced by worldwide financial drivers
 Change in development economic situations
 Competing projects draw assets and temporary worker intrigue far from this task
 Actual site conditions shift fundamentally from anticipated
 Significant delay in utility migrations

5PROJECT COST ANALYSIS & APPRAISAL

6PROJECT COST ANALYSIS & APPRAISAL
Estimated Budget:
The estimated budget that has been decided for the project is $750,000.00, in which the estimation
of construction cost is $$717,800.00. The Consultant might audit this Scope of Work and give an
account assessment and investigation of the exactness of the proposed project CCE in their
specialized proposition in light of their expert experience and conclusion. The estimate for
working on the project is $695,400.00, however there are other costs associated with the project
such as human resource, materials and etc.
The funding summary for execution of this particular project is given as below:
$450,000.00 will be borrowed from the city council.
$125,000.00 will be provided from federal government agencies.
$75,000.00 will be acquired from Reserve city funds for capital projects.
The CWE incorporates the development cost gauge and all counseling, allowing and managerial
expenses. The CWE is the Client Agency's budgetary spending plan in view of this task Scope of
Work and might not be surpassed amid the outline and development periods of the undertaking
unless DPMC supports the adjustment in Scope of Work through a Contract alteration. On
projects with a CCE under $750,000, the gauge might be set up by the Consultant's in-house staff
or their Sub-Consultant's staff amid each plan period of the undertaking. All cost gauges might be
balanced for provincial area, site factors, development staging, premium time, building use
gathering, area of work inside the building, transitory swing space, security issues, and swelling
factors in view of the year in which the work is to be performed.

7PROJECT COST ANALYSIS & APPRAISAL
Stakeholders:
Stakeholder(s) Role
Gail Stephens City Manager
Peter Sparanese Operations Manager
Katie Josephson Director of Corporate Communications
Joe Helsinki Finance Manager
Jocelyn Jenkins City Solicitor
Katie Holmes Special project director
Sasha Grey Project Advisor
Project Manager Authority Level
Staffing Decisions:
Staffing of super activities with regards to the general program is an intricate asset administration
issue. In a general sense, staffing is focused on being a "solid proprietor" in overseeing
conveyance mega projects. It is essential to use extend business (project positions are separate
from other diminishment in-compel activities that might happen in the Department). This will help
balance out WSDOT workforce needs on super tasks. These positions ought to be well thoroughly
considered and incorporate an in advance, end-of-project progress technique for lasting
representatives.
Under plan offer form conveyance, the Department has solely held duty regarding QC and QA
amid development. For crests in workforce needs, WSDOT for the most part procures transitory
representatives. These obligations should be possible by moving a portion of the QC or QA work

8PROJECT COST ANALYSIS & APPRAISAL
and hazard to the contractual worker, like outline construct. WSDOT has effectively used GECs
on remain solitary uber projects. In different states, GECs have been utilized to effectively convey
statewide projects, for example, connect restoration, and substitution. This model might be
material on future statewide WSDOT programs. For instance, if financing ends up plainly
accessible to convey the fish entry course program, rather than including extra WSDOT staff a
statewide premise, a GEC model could be used by packaging projects into one program
conveyance contract.
Budget Management and Variance:
A task control spending will be created. Expenses will be observed and contrasted with genuine
work finished preceding the City approving installment. Real expenses will be accounted for
against a gauge utilizing a fitting project costing programming bundle. Evaluations at complete
will be invigorated in conjunction with the timetable and pay measures. Dangers will be
reassessed and potential impact will be used to study cost and schedule impacts. A probability
support organization configuration will be set up.
Technical Decisions:
The blockage in peak hour causes southbound drivers achieving the circuitous to give path for long
stretches, along these lines deferring the activity behind them. This is an issue because of the
precarious slope on Bridge Street and can be especially unsafe for southbound overwhelming
vehicles sitting for an expanded measure of time. Respondents communicated bolster for the
indirect to be expelled at the convergence of George Street and Road as a major aspect of the
proposed works and supplanted with activity lights. In any case, drivers can encounter restricted

9PROJECT COST ANALYSIS & APPRAISAL
vision because of a peak in the street and this diminishes their capacity to respond rapidly at a red
light.
Conflict Resolution:
Significant degree changes related to extend augmentation or spending will be avowed by Council
that is changes to the things recorded under Scope. Changes that in a general sense adjust the
request of this Charter will be displayed to Council for positive underwriting for example change
to the desires recorded under augmentation. The Project Director will have expert to settle on
choices basic to keeping up development energy.
The prime expert will be the Group to identity in charge of the general plan trustworthiness of the
considerable number of Works to be embraced under this agreement. The prime legally binding
laborer or backer, when chosen, will be accountable for consistence with the framework desire as
set out in the reports masterminded by the MMM Group. The quality assertion program will pass
on typical reports in the midst of creation and advancement in a shape agreed to by the City
project gathering.
Approvals:
Gail Stephens
________________________________ _________________________________________
Sponsor or Originator Signature
_________________________________
__________________________________________
_________________________________
__________________________________________

10PROJECT COST ANALYSIS & APPRAISAL
2. Project Scope Statement
PROJECT SCOPE STATEMENT
Project Title: Date Prepared:
Product Scope Description
This project is aimed at replacing an existing bridge so as to ensure safety and infrastructure
development. This report gives an outline of the issues brought up in composed entries,
workshops, online gathering remarks and discourses amid this period. An aggregate of 72 entries
were gotten between August 2011 and September 2011. Issues raised will be considered amid
readiness of the natural effect articulation and the idea outline. While this report does not react in
detail to each issue raised, it includes data on how certain issues will be tended to amid planning
of the ecological effect proclamation and improvement of the idea outline.
Project Deliverables
 Improve security for drivers, walkers and cyclists.
 Improve movement and transport proficiency.
 Improve the level of surge invulnerability.
 Meet long haul group needs.
 Minimize the effect on legacy and the character of the neighborhood.
 Be a financially savvy and a moderate result.
 Potential impacts on the legacy and character of the neighborhood,
 Local people group needs, for example, walker and cyclist associations and recreational

11PROJECT COST ANALYSIS & APPRAISAL
spaces.
 Increased demand and contamination.
 Potential loss of business in the town focus.
 Traffic and transport issues.
 Safety for drivers and walkers drawing closer and intersection the extension.
 The level of surge assurance that would be given.
 The cost adequacy of the new bridge.
The work breakdown structure that has been prepared for the project are as below:
Bridge Replacement
project
Project Charter
Project Requirements
Requirements
management plan
Budget
Cost performance
baseline
Cost management
plan
Schedule
Schedule baseline
Schedule
management plan
Resources
Responsibility
charts/assignments
Human resource
plan
Communication
management plan
Scope
Scope statement
WBS
Scope baseline
Scope management
plan
Risk Assessment
Risk management
plan
Project execution
Implementation of
essential control
and maintenance
plan
Reporting progress
information
Corrective measures
planning
Development of
project award timing
Final measurement of
material quality for the
construction
Contract for bridge
painting
Development of
safety inspection for
the labors
Implementing a
status report
Bridge Working Drawings
Bridge Working
Drawings Requiring
Design
Bridge Working
Drawings Not
Requiring Design
Road Working Drawings
Road requiring
design
Road not requiring
design
Inspect the existing
steel structure
frameworks
Designing of Bridge
storm drains
Other Management Plans &
Reports
Process
improvement plan
Quality management
plan
Procurement
management plan
Weekly progress
reports
Lessons learnt /
Post-event summary
report
Project Initiation
Phase
Design Phase
Construction Phase
Completion Phase

12PROJECT COST ANALYSIS & APPRAISAL
Project Acceptance Criteria
Achievement is dependably a questionable subject. In the development business, time, cost and
quality have for quite some time been characterized as the fundamental criteria of measuring
achievement. Be that as it may, diverse thoughts have been developed in the most recent decade.
Subsequently, an exhaustive audit of Key Performance Indicators is fundamental. Right off the
bat, on the off chance that one needs to have remarkable execution, one must realize what the
meaning of progress is with a specific end goal to make remedy measures to accomplish this
objective. Without a general concession to progress, project directors still deal with their assets by
their seeing instinct. They can't guarantee whether the instrument is right or not. The proposed
structure can give a reasonable and unambiguous definition for project execution. It can likewise
upgrade customers', temporary workers', and additionally creators' comprehension of running an
effective undertaking and set a base for them to enhance the project execution. It is advantageous
to extend directors by giving accommodating data that is vital for the accomplishment of an
effective development project. Appraisal of likely project results can be determined amid
development.
Project Exclusions
The accompanying things are excluded in the development cost gauges:
1. Unanticipated subsurface condition
2. Stream adjustment
3. Right‐of‐way obtaining including brief development easements
4. Exactness of the study

13PROJECT COST ANALYSIS & APPRAISAL
5. Area of existing utilities
Project Constraints
The extension site is to a great extent situated over a current traversable conduit. There are
constraints on the contractual workers' development exercises forced by existing and proposed
arrive utilizes adjoining the arrangement, and in addition natural contemplations. Shoreline
advancement is foreseen on the two banks of the stream, and could happen inside the expected
bridge development time allotment. This improvement could have an effect on connect
development by limiting contractual worker get to. There are restricted potential arranging zones
straightforwardly neighboring the bridge site. The most encouraging existing region is accessible
land that is claimed by the Port of River. At least 1 section of land would be important to
encourage the temporary workers' stockpiling and organizing region. There is one route divert in
the region of the proposed connect areas. Route should be kept up consistently amid development.
This will compel the temporary workers' utilization of gear and superstructure (deck and support)
erection procedures. Impermanent lighting will probably be required for hardware in the
waterway.
Project Assumptions
The undertaking must be of astounding development with materials that give solidness a valuable
existence of 50 years or over.
The task's plan must be perfect structurally.
The undertaking must be worked to meet the development, fire codes and wellbeing models built

14PROJECT COST ANALYSIS & APPRAISAL
up by the State, neighborhood and government offices.
The seepage must be open for simplicity of adjusting to encourage establishment of refreshed
frameworks, and meet every pertinent code.
There will be a market interest for the private space.
The property estimation of the task will increment in any event as much as the rate of swelling.
Task development will empower the toughness of the bridge, as suitable, upon its consummation.
3. Schedule for the project
WBS Task Name Duration Start Finish Predecessors
0 Bridge Replacement project 132 days
Thu 11-
01-18
Fri 13-07-
18
1 Project Charter 64 days
Thu 11-
01-18
Tue 10-
04-18
1.1 Project Requirements 10 days
Thu 11-
01-18
Wed 24-
01-18
1.1.1
Requirements management
plan
10 days
Thu 11-
01-18
Wed 24-
01-18
1.2 Budget 12 days
Thu 25-
01-18
Fri 09-02-
18
1.2.1 Cost performance baseline 5 days
Thu 25-
01-18
Wed 31-
01-18
3

15PROJECT COST ANALYSIS & APPRAISAL
1.2.2 Cost management plan 7 days
Thu 01-
02-18
Fri 09-02-
18
5
1.3 Schedule 7 days
Mon 12-
02-18
Tue 20-
02-18
1.3.1 Schedule baseline 3 days
Mon 12-
02-18
Wed 14-
02-18
6
1.3.2 Schedule management plan 4 days
Thu 15-
02-18
Tue 20-
02-18
8
1.4 Resources 15 days
Wed 21-
02-18
Tue 13-
03-18
1.4.1
Responsibility
charts/assignments
5 days
Wed 21-
02-18
Tue 27-
02-18
9
1.4.2 Human resource plan 6 days
Wed 28-
02-18
Wed 07-
03-18
11
1.4.3
Communication management
plan
4 days
Thu 08-
03-18
Tue 13-
03-18
12
1.5 Scope 14 days
Wed 14-
03-18
Mon 02-
04-18
1.5.1 Scope statement 5 days Wed 14- Tue 20- 13

16PROJECT COST ANALYSIS & APPRAISAL
03-18 03-18
1.5.2 WBS 4 days
Wed 21-
03-18
Mon 26-
03-18
15
1.5.3 Scope baseline 3 days
Tue 27-
03-18
Thu 29-
03-18
16
1.5.4 Scope management plan 2 days
Fri 30-
03-18
Mon 02-
04-18
17
1.6 Risk Assessment 6 days
Tue 03-
04-18
Tue 10-
04-18
1.6.1 Risk management plan 6 days
Tue 03-
04-18
Tue 10-
04-18
18
2 Project execution 52 days
Wed 11-
04-18
Thu 21-
06-18
2.1
Implementation of essential
control and maintenance plan
6 days
Wed 11-
04-18
Wed 18-
04-18
19
2.2 Reporting progress information 5 days
Wed 11-
04-18
Tue 17-
04-18
20
2.3 Corrective measures planning 8 days
Thu 19-
04-18
Mon 30-
04-18
22
2.4 Development of project award 12 days Wed 18- Thu 03- 23

17PROJECT COST ANALYSIS & APPRAISAL
timing 04-18 05-18
2.5
Final measurement of material
quality for the construction
6 days
Tue 01-
05-18
Tue 08-
05-18
24
2.6 Contract for bridge painting 5 days
Fri 04-
05-18
Thu 10-
05-18
25
2.7
Development of safety
inspection for the labors
7 days
Wed 09-
05-18
Thu 17-
05-18
26
2.8 Implementing a status report 6 days
Fri 11-
05-18
Fri 18-05-
18
27
2.9 Bridge Working Drawings 7 days
Mon 21-
05-18
Tue 29-
05-18
2.9.1
Bridge Working Drawings
Requiring Design
4 days
Mon 21-
05-18
Thu 24-
05-18
29
2.9.2
Bridge Working Drawings
Not Requiring Design
3 days
Fri 25-
05-18
Tue 29-
05-18
31
2.10 Road Working Drawings 5 days
Wed 30-
05-18
Tue 05-
06-18
2.10.1 Road requiring design 3 days
Wed 30-
05-18
Fri 01-06-
18
32
2.10.2 Road not requiring design 2 days Mon 04- Tue 05- 34

18PROJECT COST ANALYSIS & APPRAISAL
06-18 06-18
2.11
Inspect the existing steel
structure frameworks
2 days
Wed 06-
06-18
Thu 07-
06-18
35
2.12
Designing of Bridge storm
drains
10 days
Fri 08-
06-18
Thu 21-
06-18
36
3
Other Management Plans &
Reports
16 days
Fri 22-
06-18
Fri 13-07-
18
3.1 Process improvement plan 3 days
Fri 22-
06-18
Tue 26-
06-18
37
3.2 Quality management plan 4 days
Wed 27-
06-18
Mon 02-
07-18
39
3.3 Procurement management plan 5 days
Tue 03-
07-18
Mon 09-
07-18
40
3.4 Weekly progress reports 2 days
Tue 10-
07-18
Wed 11-
07-18
41
3.5
Lessons learnt / Post-event
summary report
2 days
Thu 12-
07-18
Fri 13-07-
18
42
M1 Project Initiation Phase 0 days
Tue 10-
04-18
Tue 10-
04-18
1
M2 Design Phase 0 days Wed 24- Wed 24- 3

19PROJECT COST ANALYSIS & APPRAISAL
01-18 01-18
M3 Construction Phase 0 days
Mon 02-
04-18
Mon 02-
04-18
14
M4 Completion Phase 0 days
Wed 14-
02-18
Wed 14-
02-18
8

20PROJECT COST ANALYSIS & APPRAISAL
The developed schedule as presented above reflects that it will require 132 days to accomplish
the project. The project is expected to start on 11 January 2018 and finish on 13 July 2018 and
the estimated cost is $$717,800.00.
4. Costing for the project
WBS Task Name Duration Cost
0 Bridge Replacement project 132 days $717,800.00
1 Project Charter 64 days $425,000.00
1.1 Project Requirements 10 days $52,000.00
1.1.1 Requirements management plan 10 days $52,000.00
1.2 Budget 12 days $62,800.00
1.2.1 Cost performance baseline 5 days $32,000.00
1.2.2 Cost management plan 7 days $30,800.00
1.3 Schedule 7 days $21,000.00
1.3.1 Schedule baseline 3 days $9,000.00
1.3.2 Schedule management plan 4 days $12,000.00
1.4 Resources 15 days $68,600.00
1.4.1 Responsibility charts/assignments 5 days $27,000.00
1.4.2 Human resource plan 6 days $36,000.00

21PROJECT COST ANALYSIS & APPRAISAL
1.4.3 Communication management plan 4 days $5,600.00
1.5 Scope 14 days $43,000.00
1.5.1 Scope statement 5 days $27,000.00
1.5.2 WBS 4 days $4,000.00
1.5.3 Scope baseline 3 days $6,000.00
1.5.4 Scope management plan 2 days $6,000.00
1.6 Risk Assessment 6 days $24,000.00
1.6.1 Risk management plan 6 days $24,000.00
2 Project execution 52 days $260,000.00
2.1
Implementation of essential control
and maintenance plan
6 days $15,600.00
2.2 Reporting progress information 5 days $42,000.00
2.3 Corrective measures planning 8 days $19,200.00
2.4
Development of project award
timing
12 days $52,800.00
2.5
Final measurement of material
quality for the construction
6 days $27,600.00

22PROJECT COST ANALYSIS & APPRAISAL
2.6 Contract for bridge painting 5 days $17,000.00
2.7
Development of safety inspection
for the labors
7 days $18,200.00
2.8 Implementing a status report 6 days $18,000.00
2.9 Bridge Working Drawings 7 days $21,000.00
2.9.1
Bridge Working Drawings
Requiring Design
4 days $12,000.00
2.9.2
Bridge Working Drawings Not
Requiring Design
3 days $9,000.00
2.10 Road Working Drawings 5 days $9,000.00
2.10.1 Road requiring design 3 days $5,400.00
2.10.2 Road not requiring design 2 days $3,600.00
2.11
Inspect the existing steel structure
frameworks
2 days $1,600.00
2.12 Designing of Bridge storm drains 10 days $18,000.00
3
Other Management Plans &
Reports
16 days $32,800.00
3.1 Process improvement plan 3 days $3,600.00
3.2 Quality management plan 4 days $8,800.00

23PROJECT COST ANALYSIS & APPRAISAL
3.3 Procurement management plan 5 days $12,000.00
3.4 Weekly progress reports 2 days $6,400.00
3.5
Lessons learnt / Post-event
summary report
2 days $2,000.00
M1 Project Initiation Phase 0 days $0.00
M2 Design Phase 0 days $0.00
M3 Construction Phase 0 days $0.00
M4 Completion Phase 0 days $0.00
4.1 Approaches used for project cost estimation
The basic leadership in speculation projects is not troublesome when just monetary
learning is utilized. Conventional money related hypothesis utilizes NPV, IRR and Payback
period strategies in project choices. The risks in a task can likewise be broke down utilizing
affectability examination and likelihood investigation. Nonetheless, income based investigation
has a few confinements. Harris (2017), demonstrates that when learning about new future
speculation is restricted, when operational condition estimates are powerless, or when projects
are broke down with numerous impalpable and indeterminate elements which are hard to gauge,
the vulnerability and risk increment, influencing the operational income figures. The reduced
income rule habitually thinks little of project openings and does not consider any key and

24PROJECT COST ANALYSIS & APPRAISAL
different factors, making nearsighted choices and potential aggressive misfortunes. Penning-
Rowsell, Edmund, et al. (2014) refer that the choice can be considerably harder to take when
different viewpoints are considered notwithstanding budgetary ones. With a specific end goal to
take the best speculation choice, data is required about all ranges that can impact this choice. It is
key to see how all non-money related angles can be utilized as a part of task evaluation, realizing
that these could not be effortlessly measured in financial terms.
Project choice is done toward the start of an undertaking and it relies upon the last esteem
being better than the aggregate speculation. Macharis, Cathy, and Annalia Bernardin (2015),
refer that assessment strategies can be isolated into two gatherings. From one viewpoint, project
execution is measured with bookkeeping information. Payback period and bookkeeping benefit
rate are additionally considered in this gathering. Be that as it may, these assessment strategies
are lacking a result of issues related with bookkeeping information. Then again, we need to
consider trade stream criteria out project assessment. The project choice is taken in view of NPV
and IRR. This second gathering of assessment criteria have a tendency to be more utilized than
the criteria in view of bookkeeping information. In light of risk examination, we can acquire data
about perspectives that influence projects. Ika, Lavagnon and Damian Hodgson (2014), consider
that the utilization of likelihood investigation and reenactment examination methodologies can
offer a more elevated amount of trust in ultimate conclusion. The risk investigation is, all the
time, incorporated into changes in accordance with the rebate rate or cost of capital or in
acclimation to money streams and utilization of a risk free markdown rate. Navimipour, Nima
Jafari and Yeganeh Charband (2016) demonstrate that 47% of firms utilize a similar rebate rate
for all activities. This is a flag that organizations do not give careful consideration to extend
assessment chance. Unexpectedly, Barfod, Michael Bruhn and Kim Bang Salling (2015),

25PROJECT COST ANALYSIS & APPRAISAL
guarantee that organizations change the rebate rate as indicated by project sort. It is referred that
the perfect examination process ought to think about a quality and shortcoming asset report,
realizing that the choice is an exchange off between clashing criteria contrasting choices as an
essential with get an arranged arrangement.
5. Budget of the project
With respect to the way an enterprise funds its action, consider that the organization's
esteem is influenced by the capital structure utilized. Along these lines, it can be examined if
there is an ideal capital structure, the one which boosts the estimation of the firm. At last, past
the significance of speculation choice, it is basic to recognize that the way extends are financed
is likewise of extraordinary significance (Dalal-Clayton, Barry and Barry Sadler, 2014). Along
these lines, obligation arrangement and financing choices are basic to the project's reasonability.
Speculation choice investigation does not for the most part consider impetuses and data
issues that can rise by the way that the choice relies upon the reports of individuals, with their
own advantages and private data about the nature of the undertaking. Project choices can be
impacted by organization issues and asymmetry of data between the leaders (administration) and
capital proprietors (investors). Speculation choice bending can happen due to the misalignment
of administration and investor premiums, and as a result of data asymmetry amongst insiders and
outcasts. The two thought processes make the speculation touchy to the accessible assets in the
firm. Harrison, Anthony John (2017), takes note of that organizations with more income have
greater inclination to contribute, in some cases in non-lucrative activities chiefs over-contribute
for private advantages. The over-speculation builds the operator's energy since it expands the
assets under his control and frequently emerges connected to higher administrator compensate.

26PROJECT COST ANALYSIS & APPRAISAL
6. Appraisal of the project
The essential motivation behind efficient examination is to accomplish better spending
choices for capital and current consumption on plans, projects and projects. This report gives a
review of the fundamental explanatory strategies and methods which ought to be utilized as a
part of the examination procedure. These methods can likewise be utilized as a part of the
assessment procedure (Kerzner, 2013). A comprehension of marking down and Net Present
Value (NPV) counts is principal to appropriate examination of activities and projects.
In the NPV technique, the incomes and expenses of an undertaking are assessed and after
that are marked down and contrasted and the underlying project. The favored choice is that with
the most elevated positive net present esteem. Tasks with negative NPV esteems ought to be
rejected in light of the fact that the present estimation of the flood of advantages is lacking to
recoup the cost of the undertaking.
Cost/Benefit Analysis for Bridge replacement project
Category Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Value of
benefits
$40,000 $40,000 $40,000 $40,000 $40,000
Development
costs
($717,800)
Annual
expenses
($25,000) ($25,000) ($25,000) ($25,000) ($25,000)
Net
benefit/costs
($717,800) $15,000 $15,000 $15,000 $15,000 $15,000

27PROJECT COST ANALYSIS & APPRAISAL
Discount
factor
$1 0.9091 0.8264 0.7513 0.6830 0.6209
Net present
value
($717,800) $13,636 $12,397 $11,270 $10,245 $9,314
Cumulative
NPV
($717,800) ($704,164
)
($691,767) ($680,497
)
($670,252
)
($660,938)
In the above table, the calculations in context to the benefit and costs associated with the
project have been presented to illustrate upon feasibility of the project. The above calculations
show that the project is feasible to be carried out as the development cost will be one time
investment and for the next 4 years there will be profit achieved from the project. The net profit
that will be achieved for 4 years have been calculated as $15000.00 as the annual expenses
required to maintain the bridge is $275,000.00.
Cost/Benefit Analysis for Bridge replacement project
Category Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Value of
benefits
$525,000 $525,000 $525,000 $525,000 $525,000
Development
costs
($717,800
)
Annual
expenses
($250,000
)
($250,000
)
($250,000
)
($250,000
)
($250,000)
Net benefit/costs ($717,800 $275,000 $275,000 $275,000 $275,000 $275,000

28PROJECT COST ANALYSIS & APPRAISAL
)
Discount factor $1 0.9091 0.8264 0.7513 0.6830 0.6209
Net present
value
($717,800
)
$250,000 $227,273 $206,612 $187,829 $170,753
Cumulative
NPV
($717,800
)
($467,800
)
($240,527
)
($33,916) $153,913 $324,666

29PROJECT COST ANALYSIS & APPRAISAL
The above table represents the benefit or profit that can be achieved from the project with
respect to the investment that have be done for replacement of existing bridge.
Cost/Benefit Analysis for Bridge replacement project
Year of Project
year 0 year1 year 2 year 3 year 4 year 5 TOTALS
Net
econom
ic
benefit
$250,000.
00
$335,000.
00
$275,000.
00
$360,000.
00
$375,000.
00
Discou
nt Rate
6%
1 0.9434 0.8900 0.8396 0.7921 0.7473
PV Of
Benefit
s
$0.00 $235,849.
06
$298,148.
81
$230,895.
30
$285,153.
72
$280,221.
81
NPV of
all
BENEF
ITS
$0.00 $235,849.
06
$533,997.
86
$764,893.
17
$1,050,04
6.89
$1,330,26
8.70
$1,330,26
8.70

30PROJECT COST ANALYSIS & APPRAISAL
One
Time
Costs
($717,80
0.00)
Recurri
ng
Costs
$0.00 ($14,400.
00)
($14,400.
00)
($14,400.
00)
($14,400.
00)
($14,400.
00)
Discou
nt Rate
6%
1.0000 0.9434 0.8900 0.8396 0.7921 0.7473
PV Of
Recurri
ng
Costs
$0.00 ($13,584.
91)
($12,815.
95)
($12,090.
52)
($11,406.
15)
($10,760.
52)
NPV Of
All
Costs
($717,80
0.00)
($731,38
4.91)
($744,20
0.85)
($756,29
1.37)
($767,697
.52)
($778,458
.04)
($778,458
.04)
Overall
NPV
$551,810.
66
ROI 0.71
Breake

31PROJECT COST ANALYSIS & APPRAISAL
ven
analysis
Yearly
NPV
Cashflo
w
($717,80
0.00)
$222,264.
15
$521,181.
92
$752,802.
65
$1,038,64
0.74
$1,319,50
8.18
Overall
NPV
Cashflo
w
($717,80
0.00)
($495,53
5.85)
$25,646.0
7
$778,448.
72
$1,817,08
9.45
$3,136,59
7.63
Project Breakeven occurs between year 1 and 2 Actual Breakeven 1.95
The calculations in the above table represents the period in which the profit can be
achieved from the project. The breakeven period for this particular project is calculated to be in
between Year 1 and 2. The breakeven period is calculated with the help of yearly NPV analysis
and overall NPV flow that is available during execution of the project.
The benefit that has been derived in the Cost benefit analysis is in context to NPV (Net Present
Value) this means that the profit that will achieved in terms of the net present value of the whole
project. This includes the direct as well as indirect costs associated with the project. The overall
economic benefit that will be achieved from this project is estimated to be $$551,810.66. The net
economic benefit has been derived by calculating the total annual expenses that will be incurred
for the bridge total costs for development. The annual expenses comprise of maintenance, costs
for staffs and resources.