In construction project appraisal, what does net present value primarily measure?
Correct answer: A. The difference between discounted benefits and discounted costs
- A. The difference between discounted benefits and discounted costs
- B. The difference between planned and actual quantities of concrete
- C. The percentage of project work completed at a given date
- D. The total number of resources assigned to a project activity
Explanation
Net present value discounts future project cash inflows and outflows to the present and calculates their net difference. A positive value generally indicates that discounted benefits exceed discounted costs at the chosen rate.
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Construction management covers planning, scheduling, resource control, contracts, procurement, site organisation, safety, quality assurance and project documentation. Estimation includes quantity take-off, rate analysis, bill preparation, valuation and cost control, with attention to the difference between direct and indirect costs and between an estimate, a tender and a final account.
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