Showing posts from 2015

Supporting Green Decisions With Financial Simulations

“Nothing is more powerful than an idea whose time has come.”
Victor Hugo
Sustainability is the idea of which the time has come. In earlier posts Decision Making Through  Life Cycle Costing- A Simple Practical Example  and Life Cycle Costing-2: A Practical Project Feasibility Example

Solutions  were worked out with side by side generating the cash flows and evaluating the Present Worths of the two alternate cash flows. 

The life now is not as simple as say a decade ago when the above solutions were evolved and accepted. The clients are more demanding and we have numerous options & better software tools. Most importantly passionate green professionals have to strive and inch all solutions towards sustainability. 

FOCUS: Supporting Green Decisions With Financial Simulations
Sheer inertia and lack of qualified professionals in the Indian Construction Industry are main factors that inhibit innovations. So business goes as more! With increasing transparency and environmental …

Life Cycle Costing-2: A Practical Project Feasibility Example

In an earlier simpler example ,we have worked out the PV (Present Value) of two  possible cash flows for decision making.
The example presented in this blog further works out two scenarios side by side and calculates the Payback period of an expenditure as well. As usual, one need to consult Subject Matter Experts and get the advise on the inputs.
Problem StatementDecision is required whether to replace Sodium Vapour  Lights with LED Lights.
Cash Flows are created on the basis of expert inputs which may be provided or obtained from Facility Management, Procurement and  Electrical Engineering Departments. Risk Management part may also be deliberated  with Accounts, Finance and Legal Departments and can also be reflected into the cash flow. The Excel workbook has been set in  a user friendly setup and may be understood by even a casual Excel User.
Download the work book
The following risk factors (not covered in the simulation) are also worth considerations/ evaluation. The scope of analysi…

Decision Making Through Life Cycle Costing- A Simple Practical Example

Decision Making Through  Life Cycle Costing- A Simple Practical Example Problem Statement: To compare the life cycle costing by calculating the single Present  Value for different scenarios.
A choice is required to be made for air conditioning by
Installing AC onlyInstalling AC along with insulation works and solar film . The variables would be the Initial costs and the Cost of Capital. The link below would take you to the Excel worksheet wherein the comments in each cell would make you understand the process fully. It is assumed that the user is a knowledge worker and the input parameters have been evaluated through experts. Excel Workbook has been set in a manner that is fit for a novice excel user.

Download The Excel File

Related Article -