Marshall, H E (1985) A graphical approach to discounted payback. Construction Management and Economics, 3(2), pp. 105-120. ISSN 01446193
Abstract
Construction planners and building owners use payback frequently as an index of economic performance. Discounted payback, which considers the time value of money in measuring the time to project payoff, is a more accurate index of project cost effectiveness than simple payback. But being more difficult to calculate, it is used less often than simple payback. This paper provides a unique set of graphs that helps decision makers find discounted payback quickly and easily without complex calculations. Appropriate applications of simple and discounted payback are described. Examples of economic efficiency losses from using payback instead of more appropriate evaluation measures and from using simple instead of discounted payback are presented.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | benefit-cost analysis; building economics; discounted payback; economic analysis; payback |
| Index terms: | effectiveness, owner, efficiency, economic analysis, building economics, payback, construction planner, project cost, cost analysis |
| Subjects: | sociology, cost management, performance management, economics, design analysis, economic analysis, financial and cost management, practitioner |
| Topics: | Roles and Professions, Stakeholder Management, Business Strategy, Cost Management, Site Management, Design Practice, Quality Management |
| Descriptive scope: | 4 PCTA |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here