ABSTRACT
Capital budgeting identifies and values potential investment opportunities to enable investors to make sound investment decisions. Present value and net present value are commonly used to form the basis for valuation for real assets and investment decisions. The decision of whether to go ahead with a project is given as a cut-off period beyond which capital investment proposals should be rejected. Simple payback is used extensively within the buildings trade, particularly when assessing the cost effectiveness of component upgrades or replacements and component additions. Most of the assessment tools are computer-based models providing life cycle or environmental impact assessments. Some are simply methodologies to be followed during design and construction. Credits are awarded by a trained assessor in each area according to performance against strict design target levels. A set of environmental weightings is used to produce a single overall score.
