Time Value of Money in Capital Planning and Incentive-Based Programs

Course Description

In today's evolving regulatory and financial landscape, licensed engineers are increasingly expected to factor economic performance into design, planning, and decision-making processes. Yet many technically sound engineering projects fail to gain approval not due to design flaws, but because engineers struggle to articulate the long-term financial benefits that extend beyond initial capital costs. This reality has led to countless robust designs being shelved due to perceived capital constraints, when proper financial analysis would have demonstrated their true value proposition.

This course provides a focused, practical application of core Time-Value-of-Money (TVM) principles such as Net Present Value (NPV), Internal Rate of Return (IRR), and lifecycle cost analysis as they relate to infrastructure projects, equipment upgrades, incentive-based programs, and capital investments. By mastering these financial communication skills, engineers can prevent viable projects from being dismissed due to incomplete economic analysis.

This course equips learners to analyze long-term cash flows, assess return on public or private investments, and evaluate rebate or credit-based funding mechanisms, giving them the tools to successfully advocate for technically excellent projects by demonstrating their financial merit. Real-world case studies and modeling walkthroughs help translate abstract financial concepts into actionable engineering insights that can make the difference between project approval and project abandonment.

Learning Objectives

1. Apply TVM concepts (NPV, IRR, payback period) to capital and infrastructure projects.

2. Analyze the financial implications of incentive-based or rebate-driven programs over project lifecycles.

3. Develop comparative lifecycle cost models for engineering investments.

4. Evaluate the fiscal and regulatory rationale for project selection and prioritization.