Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
1115926 | Procedia - Social and Behavioral Sciences | 2014 | 10 Pages |
Abstract
The advent of megaprojects is exacerbating the need for a comprehensive tool for decision making. Financial resources are scarce and cost-benefit analysis (CBA) can help decision makers select the most efficient allocation of these resources. This paper addresses CBA as an evaluation tool and its major weaknesses. We conclude that the treatment of residual value (RV) is inadequate and needs further research. RV represents the value of the infrastructure at the end of its project lifetime and the value that the asset generates over time. The current methods for calculating RV do not properly reflect the true value.
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