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CIVL2812: Project Appraisal (2019 - Semester 2)

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Unit: CIVL2812: Project Appraisal (6 CP)
Mode: Normal-Day
On Offer: Yes
Level: Intermediate
Faculty/School: Civil Engineering
Unit Coordinator/s: Dr Cafe, Peter
Session options: Semester 2
Versions for this Unit:
Campus: Camperdown/Darlington
Pre-Requisites: None.
Prohibitions: ENGG2850 OR CIVL3812.
Brief Handbook Description: This unit aims to introduce students to project valuations using present-value cash flow theory, taxation and probabilities, and the role of these valuations in the decision-making process. Students are taught techniques for making an analysis of issues involved in project appraisal by various methods and these are applied to businesses, non-profit organisations, and governments. At the end of this unit, students should be able to comprehend and relate to real-life examples the fundamental concepts in project appraisal (e.g. the meaning of time value for money, equivalence); calculate common financial indicators for a given project and explain the relevance of each to the appraisal of the project; rank projects by combining both financial and non-financial indicators (e.g. environmental and social); understand how risks and uncertainties affect evaluation outcomes and be able to deal with uncertainties and risks in analysis; apply techniques to account for the effects of inflation/deflation and exchange rates in analysis; understand the concept and mechanisms for depreciation and carry out pre-tax as well as post-tax analysis; understand the assumptions, pros and cons of each evaluation method and be able to explain why a particular method is appropriate/not appropriate for a given project. The syllabus covers the following concepts:

time value of money, cost of capital, simple/compound interest, nominal/effective interest, cost/benefit analysis of projects;

equivalence, net present worth (value), future worth (value), annual worth (value), internal rate of return, external rate of return, payback period;

cost-benefit analysis, cost-utility analysis, identifying and quantifying non-financial benefits/externalities;

Other influencing factors: price changes and exchange rates, depreciation, taxation;

Capitalisation and valuation studies, replacement of assets, real option, project risk analysis, decision-tree analysis, WACC, MARR, equity capital, debt.

This UoS is a second-year core unit for students enrolled in Civil Engineering (any major), and is a possible elective in other schools of engineering.
Assumed Knowledge: MATH1005.
Lecturer/s: Dr Cafe, Peter
Timetable: CIVL2812 Timetable
Time Commitment:
# Activity Name Hours per Week Sessions per Week Weeks per Semester
1 Lecture 2.00 1 13
2 Tutorial 2.00 1 11
3 Independent Study 6.00 13
4 Online quizzes 2.00 2 12
T&L Activities: There will be two one-hour lecture sessions each week. Following each lecture session, tutorial sessions will be conducted. Since we are taking a problem-centred approach, it is not sufficient to totally rely on lectures. You should prepare for each lecture session by going through the nominated readings for each lecture session (See the learning programme page) before the lecture, digest course content and work on the problem set from each class. To achieve the learning outcomes, each student is expected to spend about 10 hours on the subject each week, including two hours on lectures, two hours on tutorials and six hours self study. In addition to attending lectures and tutorials, it is essential that you complete the online quizzes in time.

Learning outcomes are the key abilities and knowledge that will be assessed in this unit. They are listed according to the course goal supported by each. See Assessment Tab for details how each outcome is assessed.

(8) Professional Effectiveness and Ethical Conduct (Level 2)
1. Rank projects by combining both financial and non-financial indicators (e.g. environmental and social).
(7) Project and Team Skills (Level 2)
2. Comprehend and relate to real-life examples the fundamental concepts in project appraisal (e.g. the meaning of time value for money, equivalence).
3. Calculate common financial indicators for a given project and explain the relevance of each to the appraisal of the project.
4. Understand how risks and uncertainties affect evaluation outcomes and able to deal with uncertainties and risks in analysis.
5. Apply techniques to account for the effects of inflation/deflation and exchange rates in analysis.
6. Understand the concept and mechanisms for depreciation and carry out pre-tax as well as post-tax analysis.
7. Understand the basic concepts in financing and be able to carry out basic financing analysis.
(1) Maths/ Science Methods and Tools (Level 2)
8. Understand the assumptions, pros and cons of each cash flow evaluation method and able to explain why a particular method is appropriate/not appropriate for a given project.
9. Understand the challenges of multiattributed decision-making and able to apply an appropriate model to a given project for effective decision making.
Assessment Methods:
# Name Group Weight Due Week Outcomes
1 Online Exercises No 15.00 Multiple Weeks 1, 2, 3, 4, 5, 6, 7, 8, 9,
2 Mid-Sem Exam No 25.00 Week 7 1, 2, 3, 4, 5, 6, 7, 8, 9,
3 Final Exam No 50.00 Exam Period 1, 2, 3, 4, 5, 6, 7, 8, 9,
4 Participation No 10.00 Multiple Weeks 1, 2, 3, 4, 5, 6, 7, 8, 9,
Assessment Description: Online exercises: 24 sets of online calculation exercises with 5 questions each. Solution hints will be given as feedback following the deadline for each set. Best 15 results are counted towards your total mark.

Mid Semester exam: 1.5 hours, covering content over the first seven weeks of study.

Final Exam: 2 hours, covering all content of this Unit of Study.

Participation: evaluated on the preparedness for tutorial problems and contribution to tutorial discussions.

Peerwise: You are required to develop 5 multiple choice questions with both questions and answers. Meanwhile, you are also required to answer and comment on other students’ question sets (at least on 15 sets).
Grading:
Grade Type Description
Standards Based Assessment Final grades in this unit are awarded at levels of HD for High Distinction, DI (previously D) for Distinction, CR for Credit, PS (previously P) for Pass and FA (previously F) for Fail as defined by University of Sydney Assessment Policy. Details of the Assessment Policy are available on the Policies website at http://sydney.edu.au/policies . Standards for grades in individual assessment tasks and the summative method for obtaining a final mark in the unit will be set out in a marking guide supplied by the unit coordinator.
Policies & Procedures: See the policies page of the faculty website at http://sydney.edu.au/engineering/student-policies/ for information regarding university policies and local provisions and procedures within the Faculty of Engineering and Information Technologies.
Prescribed Text/s: Note: Students are expected to have a personal copy of all books listed.
  • Engineering Economy
Recommended Reference/s: Note: References are provided for guidance purposes only. Students are advised to consult these books in the university library. Purchase is not required.
Library e-Reserve: Please check the Library e-Reserve site for additional course resources.

Note that the "Weeks" referred to in this Schedule are those of the official university semester calendar https://web.timetable.usyd.edu.au/calendar.jsp

Week Description
Week 1 Introduction
Introduction— Time-Money relationship
Week 2 Application of Time-Money Relationship
Equivalence I
Week 3 Project Evaluation Methods
Equivalence-II
Week 4 Project Evaluation Methods-continued
Comparing alternatives-I
Week 5 Depreciation and income taxes
Comparing alternatives-II
Week 6 Price changes and exchange rates
Depreciation and income taxes-Continued
Week 7 Price changes and exchange rates-continued
Replacement analysis
Assessment Due: Mid-Sem Exam
Week 8 After-tax Replacement studies
Week 9 Dealing with uncertainties
Week 10 Benefit-cost analysis
Week 11 Risk analysis & DTA
Week 12 Financing
Dealing with multiattributed decisions
Week 13 Revision
Project Appraisal in Practice
Exam Period Assessment Due: Final Exam

Course Relations

The following is a list of courses which have added this Unit to their structure.

Course Year(s) Offered
Civil/ Project Management 2019, 2020
Civil 2016, 2017, 2018, 2019, 2020
Civil / Arts 2016, 2017, 2018, 2019, 2020
Civil / Commerce 2016, 2017, 2018, 2019, 2020
Civil / Design in Architecture 2016, 2017, 2018, 2019, 2020
Civil / Medical Science 2016, 2017
Civil / Music Studies 2016, 2017
Civil / Science 2016, 2017, 2018, 2019, 2020
Civil/Science (Health) 2018, 2019, 2020
Civil / Law 2016, 2017, 2018, 2019, 2020
Civil Mid-Year 2016, 2017, 2018, 2019, 2020
Bachelor of Project Management- Construction Major (Table A) 2019, 2020
Civil/Science (Medical Science Stream) 2018, 2019, 2020
Civil / Project Management 2016, 2017, 2018

Course Goals

This unit contributes to the achievement of the following course goals:

Attribute Practiced Assessed
(8) Professional Effectiveness and Ethical Conduct (Level 2) No 11.11%
(7) Project and Team Skills (Level 2) No 66.66%
(6) Communication and Inquiry/ Research (Level 2) No 0%
(2) Engineering/ IT Specialisation (Level 2) No 0%
(1) Maths/ Science Methods and Tools (Level 2) No 22.22%

These goals are selected from Engineering & IT Graduate Outcomes Table 2018 which defines overall goals for courses where this unit is primarily offered. See Engineering & IT Graduate Outcomes Table 2018 for details of the attributes and levels to be developed in the course as a whole. Percentage figures alongside each course goal provide a rough indication of their relative weighting in assessment for this unit. Note that not all goals are necessarily part of assessment. Some may be more about practice activity. See Learning outcomes for details of what is assessed in relation to each goal and Assessment for details of how the outcome is assessed. See Attributes for details of practice provided for each goal.