This module will introduce students to the approach and methods of economics and finance theory, then apply these to thinking about projects. Subsequently students are introduced to economic and accounting approaches to business performance.

The module uses these concepts relating to projects, firms and measures of performance, to develop an understanding of the factors affecting the organisation, efficiency, capacity, productivity and profitability of project-based industries and firms. This has a resonance with project contractors and construction industries, and firms in particular.

The term paper will develop your ability to compare and account for differences in the performance of alternative project-based businesses.

The lectures may include the following:

Project-based enterprises: from project cash flows to enterprise business ratios.
	The broad capital project based sector and its enterprises
	Construction contracting as a business activity; explanation and discussion of the term paper brief with an introduction of Du Pont formulae.
	Business context and performance: Porter’s ‘five forces’ model
	Production concepts: value added; wages and profits; price indices and real output. Project value, cost and price. An introduction to sunk cost, quasi rent and process specificity.
	Productivity concepts: output per unit of input; physical and value productivity; measuring resources; unit labour cost
	Project owners and project profitability concepts: introduction to project investment appraisal using NPV or IRR
	Project investment appraisal, risk and choice of discount rate: market risk and unique risk
	Project investment appraisal and the cost and benefit of methods of risk transfer
	Who are the clients of project contractors? What are clients’ objectives in commissioning projects?
	Financial accounting concepts
	Stock Market Concepts and the stock market valuation of a firm
	Market concepts and markets for projects
	The contracting system: a way of relating clients, projects and project-based firms (project contractors)
	Team Q & A session on the assignment