G2-Written Report - Chapter 4
G2-Written Report - Chapter 4
G2-Written Report - Chapter 4
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Submitted by:
Abaloyan, Angiel Vien
Abinguar, Ma. Rona Gem
Bayani, John Mark
Bello, Antonino Jr.
Boloc, John Michael
Caro, Guillian Io
In every construction project an estimate of the construction cost is one of the necessary
pieces of information that the engineer must provide to the client for them to prepare the money
needed to use for the construction of the project, during this phase the client consider and think if
the project will be worth it or not because the decision he made today may become the reason for
their down falls and if fortunate enough becomes the reason for their success this idea is under the
concept of the time value of money, it states that the present amount of money is worth more than
the same amount in the future due to its potential earning capacity and the reason for this are the
factors like inflation, consumption, investment opportunities and risk and uncertainty all this
factors gives as the idea on why our money today is worth more than the same amount tomorrow.
For example, if a client or businessperson manage his money well and put it in an investment
where there is a big chance for it to earn more, then the worth of the past money is more than
todays because of the difference in time.
Two techniques that are used for the time value of money are the compounding techniques
or future value technique and the discounting/present value technique. The first technique which
the compounding technique is use for the process of calculating the future values of cash flows
whereas the latter is for the process of calculating present value of cash flows. The importance of
the time value of money are on its investment decision and capital budgeting decision. The
ownership cost is the cumulative result of those cash flows an owner experience it involve the
purchase expense salvage value and the likes.
Types of equipment lease consist of capital lease and operating lease. Capital lease is
usually long-term and non-cancellable and is used to lease equipment that the company wants to
use in the long term or purchase at the end of the lease period. While the Operating lease is short-
term and cancellable before the expiry of the lease period. It is common for businesses that want to
use the equipment for a short period or replace the equipment at the end of the lease. Some of the
Advantages of Renting Construction Equipment are as follows: Equipment is reliable and well
maintained, Features latest technology, No capital investment needed, you can work with the right
equipment and many more. There are three basic methods discussed to us for securing a particular
machine to use on a project: the rent buy and lease, and some of the factors to be considered Rent-
Lease-Buy Decision are How long will you need an item and how much is it worth?, What is
feasible for your budget?, Do you need your equipment or real estate to be customized?and etc.
For the next topic it is about the Financial Management and construction, as what we have learned
To reduce project costs, increase revenues, and ensure long-term firm financial stability, financial
resources must be allocated and tracked in construction financial management.-It is during the
design stage that measures to keep the cost of a project within a budget figure are most
effective.They also explained about the Producing an initial cost-estimate of project that an early
stage an employer will want to know the probable cost of his intended project. Usually no realistic
figure is possible until a feasibility study of the project has been completed.There are also three
main methods of producing this are as follows:• By reference to the cost of similar projects - the
reference costs need to be accompanied by data, such as project size, project components and
distinctive features, dates of construction, and whether the price includes land, legal and
engineering costs.
• By sketch layout and component costing - The components can be roughly sized so that their
possible cost can be estimated by comparison with price data held for similar structures. This
procedure can also reveal costs for items which might otherwise been missed.
• By use of cost curves if available - using published cost curves, is not very reliable, because the
data on which such curves are based is so frequently absent, and virtually every civil engineering
project has some unique feature substantially affecting its cost.And lastly they thought us about
The final estimate of cost drawn up by the engineer should be based on current prices and include
a substantial contingency sum. It need not include for possible future inflation of prices, because
this is a matter for the employer’s financial advisers to deal with, but the basis of the estimate
should be clear.
Creating the most value for their clients has always been the main objective of South Bay
Construction. Value engineering has been discovered to increase added value and decrease costs
for its clients during the design and construction processes. When presenting value engineering
proposals to each customer, their team of project managers meticulously takes into account all
facets of the project. They thoughtfully evaluate and completely outline each possibility in the
following areas:
- Value-added items are better-quality goods that will boost the client's value and overall
project satisfaction.
- Life-Cycle Analysis: choices that strike a balance between up-front building expenses and
the development's long-term operating budget.
- Maintainability: suggestions for items and systems that will lower maintenance costs
throughout the course of the building's life.