# What is Construction Technology Economic Evaluation Method?

The method of calculation, analysis, comparison, demonstration and selection of the economic effects of architectural technical schemes. To produce a certain construction product, due to the use of different design schemes, different construction materials, different construction techniques and mechanical equipment, resulting in differences in production costs, use functions, years of service and rates usage and maintenance fees, resulting in different economic effect.

The construction technology economic evaluation method is a scientific method to select the best economic effect of multiple technical schemes, which is of great importance to promote the development of construction production technology and save social labor.

??Evaluation principles?In China, the economic evaluation of construction technology follows the general principles of socialist economic and technical evaluation, requiring the least possible labor consumption and labor occupation to achieve the stated functional goals of the program technical; when the local economic effect of the The technical program is related to the national economy. When the effect is contradictory, the magnitude of the national economic effect should be used as the final evaluation criterion.

Evaluation steps? The basic steps of the technical and economic evaluation of buildings are: ? List the available technical options; ?Determine benchmarks and comparable conditions; ?Establish a system of indicators that reflect the economic effects and specify calculation methods; ?Calculate technical and economic indicators of different technical solutions Value; ?Compare, analyze, evaluate and select the best.

The evaluation methods are mainly the following:

Multiple index evaluation method through the calculation, analysis and comparison of a series of technical and economic indicators that reflect the function and consumption characteristics of construction products, evaluate the economic effects of technical construction solutions. It can be divided into:

Multiple index comparison method. The indicators of the indicator system are divided into two groups of main indicators and auxiliary indicators according to their importance in the evaluation, and the evaluation opinions are presented according to the comprehensive analysis and comparison of each indicator value. Its characteristic is to compare labor consumption and occupation on the premise of the same function. This method is widely used in China. The main commonly used indicators are project cost, main material consumption and construction period; Auxiliary indicators include the consumption of vital labor, construction machinery and equipment, and one-time investment in production bases, building life, and energy consumption. Expect.

Comprehensive multi-indices scoring method. Add functional indicators (such as applicability, safety, durability, artistry, etc.) based on the multi-index comparison method, and formulate quantitative scoring standards based on good or bad functions and low or high labor consumption , and use good features. and low labor consumption Those who score high and determine the relative weight value of each indicator, convert the value of each indicator from different units of measure into summable scores, and then perform a comprehensive evaluation. The calculation formula is

C

R is the global score of the technical solution; C i is the score

of the

i-th index;

W i is the weighting value of the

i-th index.

As a result of the calculation, the schema with a higher overall score is the best.

The payback period method consists of measuring the economic effects of technical solutions based on the rate of return on investment. It is only applicable to the economic evaluation of technical solutions for profitable projects. The calculation formula is

R = I / P In the formula,

R is the payback period (years);

I is the amount of investment required for the technical solution;

P is the annual net income after the realization of the solution.

??As a result of the calculation, when the R-value is less than the fixed payback period, the plan is feasible.

??Investment Compensation Period Method: ??When the initial investment and current cost (or product cost) of two or more engineering projects are different from each other, this method can be used to evaluate the technical solution. The calculation formula is

??? In the formula,

I

e is the payback period of the investment (years);

1 and

1 are the initial investment required for technical schemes 1 and 2 (

1?

1 );

1 are the annual regular after completion of schemes 1 and 2 Rate (or cost,

1 <

1 ). As a result of the calculation,

the solution with a

smaller I e value is better.

??The cost conversion method?is the sum of the recurring annual cost of the finished project of different technical programs and the annual initial investment converted according to the standard investment effect coefficient as the basis for the economic evaluation of the technical program. The calculation formula is

C v = C 1 + EI In the formula,

v is the annual conversion cost;

1 is the annual current cost;

E is the standard investment effect coefficient;

I is the total initial investment.

As a result of the calculation, the solution with a smaller Cv value is the best.

Lifetime cost-benefit analysis?is a dynamic analysis method, characterized by considering the time factor of funds and evaluating the economic effects of the technical solution by calculating the lifetime cost and revenue of the project served by the technical solution. The entire service life of buildings and structures refers to the entire process, from inspection, design, construction, use after completion to scrapping and dismantling, that is, the end of service life.

The composition of the total cost of living: ?Initial construction cost, which includes: land development cost, study and design cost, engineering construction cost; ?Use period maintenance cost, ie labor cost and material cost for day-to-day maintenance and management of the building, structure, and equipment, insurance premiums, taxes, etc.; ? Demolition fee, i.e. the balance of the design, contracting, supervision, inspection, etc. of the demolition project after deducting the salvage value of the project Profit refers to income during the period of use, such as house rental, theater fee income, and road and bridge maintenance fees or tolls. The most commonly used methods include:

??? Net present value. It is suitable for the evaluation of profitable project schedules. The calculation method is to convert the cash inflows and outflows year by year throughout the life of the program into the present value according to the reference discount rate, and then obtain the algebraic sum.

When the net present value is greater than or equal to zero, the scheme is feasible; when multiple schemes are compared, the scheme with the higher net present value is preferred. The calculation formula is

Where NPV is the net present value;

P t for the first

t of annual cash inflows;

C t for the first

t years of cash outflows;

i is the reference discount rate;

n- for the life of the project (years);

t as income OR the number of years in which the expense occurred.

??? Net present value ratio. That is, the relationship between the net present value and the present value of the required investment. The plan with a higher ratio is better. The calculation formula is

????????NPVR = NPV / IPV where NPVR is the ratio of net present value; NPV is the net present value; IPV is the present value of the total investment.

??? Annual equivalent. The net present value is converted to the annual equivalent cost over the entire life cycle using the coefficient of return on investment, that is, the annual equivalent. The conclusion of the evaluation is the same as the net present value. On this basis, the economic life of the program can be studied to determine a reasonable and economic useful life. The calculation formula is

Where AC is the equivalent annual cost; NPV is the lifetime net present value;

i is the reference discount rate (interest rate);

n is the life of the project (years).

??? Internal rate of return. It is the rate of return on investment when the lifetime net present value equals zero, that is, the rate of return on investment calculated by the discount method. It is only applicable to the evaluation of technical solutions for profitable projects, and is one of the main indicators to evaluate the economic effects of technical solutions. The calculation formula is

??Solve for i ? in the formula , that is, obtain the internal rate of return. The solution is feasible when i ? is higher than the benchmark rate of return. When comparing multiple plans, the plan with the highest internal rate of return is the best.

For technical solutions for public buildings and public works (such as bridges, roads, railways), the national economic and social effects must be considered when making decisions. Therefore, the scope of calculation of costs and benefits should be expanded to include Departments related to this program.

For example, the cost of highway engineering includes the cost of agricultural land occupation loss in addition to the one-time investment and maintenance cost; The benefits include not only road maintenance fees (or road tolls), but also the benefits of reduced vehicle transport. Cost and time savings.

Wait. Benefits that are not easy to measure in currency, such as the impact on society, the environment and ecology, can be argued qualitatively.

?Editor-in-Chief of the China Rural and Urban Construction Economic Research Institute: “Basic Manual of Construction Work”, China Construction Industry Press, Beijing, 1983.