|6. Economic Evaluation of Facility Investments
6.1 Project Life Cycle and Economic Feasibility
Facility investment decisions represent major commitments of corporate resources and have serious consequences on the profitability and financial stability of a corporation. In the public sector, such decisions also affect the viability of facility investment programs and the credibility of the agency in charge of the programs. It is important to evaluate facilities rationally with regard to both the economic feasibility of individual projects and the relative net benefits of alternative and mutually exclusive projects.
This chapter will present an overview of the decision process for economic evaluation of facilities with regard to the project life cycle.