Capital Cost Estimating Overview

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Questions and Answers

What is the primary purpose of capital cost estimating in project management?

To simplify procurement processes

To calculate profit margins

To reduce labor costs

To determine project feasibility (correct)

Which of the following components is NOT part of capital cost estimating?

Direct Costs

Return on Investment (correct)

Indirect Costs

Contingency

Which method of capital cost estimation involves breaking costs down item-by-item?

Unit Cost Estimation

Detailed Estimation (correct)

Analogous Estimation

Parametric Estimation

Which factor is likely to lead to increased complexity in capital cost estimating?

Use of outdated technology Signup and view all the answers

What type of capital cost estimate is typically used during the final design phase?

Definitive Signup and view all the answers

Which ethical principle most directly guides behavior in cost estimation?

Principles of conduct Signup and view all the answers

What is a significant challenge in capital cost estimating?

Market price volatility Signup and view all the answers

Which estimate is prepared during the construction phase with the highest precision?

Control Signup and view all the answers

What must engineers do when they believe a project will not be successful?

Advise their clients or employers Signup and view all the answers

Which of the following actions is NOT permitted for engineers regarding gratuities?

Receiving gratuities as a thank you Signup and view all the answers

What should engineers do concerning their professional qualifications?

Clearly represent their qualifications and experience Signup and view all the answers

What is required of engineers regarding conflicts of interest?

Avoid known or potential conflicts Signup and view all the answers

Which of the following actions related to political contributions is permitted for engineers?

Securing salaried positions through employment agencies Signup and view all the answers

What is expected from engineers when giving credit for engineering work?

Recognize the propriety interests of others Signup and view all the answers

How should engineers approach advertising their professional services?

Advertise without misleading language Signup and view all the answers

What is the guideline for engineers accepting professional employment outside their regular work?

Not permitted under any circumstances Signup and view all the answers

What should engineers do before accepting an assignment outside their field of competence?

Limit their involvement to phases they are qualified for. Signup and view all the answers

Which of the following actions is NOT permissible for engineers when issuing public statements?

Promoting their own accomplishments excessively. Signup and view all the answers

Which principle should engineers prioritize according to Canon 1?

Public safety, health, and welfare Signup and view all the answers

When should engineers express opinions as expert witnesses?

When they possess adequate knowledge of facts and technical competence. Signup and view all the answers

What is the primary responsibility of engineers when their professional judgment is overridden?

To inform clients or employers of possible consequences Signup and view all the answers

Under what condition may engineers use their Engineering title?

Only after registering as a professional engineer. Signup and view all the answers

Under what condition should engineers approve documents they have reviewed?

When they determine documents are safe for public health Signup and view all the answers

What should an engineer do if they suspect a violation of Canon 1 by another party?

Present the information to the proper authority in writing Signup and view all the answers

What is the primary responsibility of engineers towards their employers or clients?

To act as faithful agents or trustees. Signup and view all the answers

Which of the following is NOT a focus of engineers according to Canon 1?

Maximizing financial gains for stakeholders Signup and view all the answers

Which statement about engineers issuing professional reports is incorrect?

They can omit data that may harm their reputation. Signup and view all the answers

What should engineers do with criticisms or statements prompted by interested parties?

Make them but cite the source of interest. Signup and view all the answers

What is the emphasis of Canon 2 regarding the work performed by engineers?

Working only within their areas of competence Signup and view all the answers

Which action is encouraged for engineers to enhance the quality of life of the public?

Practicing sustainable development principles Signup and view all the answers

Which practice is discouraged for engineers when explaining their work?

Promoting their own interests excessively. Signup and view all the answers

What role does sustainable development play in Cannon 1?

It is fundamental to the engineers' responsibilities Signup and view all the answers

What is prohibited for engineers regarding the reputation of other engineers?

Injuring their professional reputation maliciously Signup and view all the answers

Which behavior is considered derogatory to the honor of the engineering profession?

Engaging in fraudulent or dishonest practices Signup and view all the answers

What should engineers avoid when utilizing their employer's resources?

Using them for non-work-related projects without permission Signup and view all the answers

What is an essential practice for engineers concerning professional development?

Engaging in continuing education courses Signup and view all the answers

How should engineers approach the registration of their employees?

Support them in registering at the earliest possible date Signup and view all the answers

What is the recommended action for engineers concerning technical presentations?

Encourage employees to attend and present at meetings Signup and view all the answers

What principle should engineers uphold regarding the relationship between employers and employees?

Maintaining mutually satisfying relationships Signup and view all the answers

What should Engineer A recommend to the client regarding safety during construction?

Ensure a full-time, on-site project representative is hired Signup and view all the answers

What obligation must Engineer A prioritize according to the Code of Ethics before proceeding with the project?

Protecting safety, health, property, and welfare of the public Signup and view all the answers

What should Engineer A do if their professional judgment is overruled in a way that endangers public welfare?

Notify their employer or client and appropriate authorities Signup and view all the answers

Was Engineer A's act of using Engineer B's proposal considered ethical?

No, it undermines the proprietary interests of Engineer B Signup and view all the answers

Which Code of Ethics principle was likely violated by Engineer A when submitting a proposal based on another engineer's work?

Engineers should compete fairly and not take advantage of others Signup and view all the answers

What might be a consequence for Engineer A if they fail to give credit for Engineer B's work?

Legal repercussions for intellectual property theft Signup and view all the answers

What action reflects a violation of the obligation to recognize proprietary interests in engineering ethics?

Utilizing confidential data from a competitor's proposal Signup and view all the answers

When proposing a project, what must engineers ensure according to the ethical code?

That the project will be successful Signup and view all the answers

What underlying ethical principle may have motivated Engineer A to proceed with the project despite the client's concerns?

The expectation that client directives supersede ethical obligations Signup and view all the answers

Study Notes

Basic Capital Cost Estimating

Capital cost estimating is crucial for project planning and execution
It helps engineers develop accurate estimates, mitigate risks, and ensure project success
Estimating determines project feasibility, aids budgeting and planning, facilitates decision-making, identifies financial risks, and provides a baseline for cost control

Components of Capital Cost Estimating

Direct Costs: Construction, procurement, installation
Indirect Costs: Engineering fees, permitting, management
Contingency: Allowance for unforeseen expenses
Escalation: Adjustments for inflation
Taxes and Financing Costs: Associated taxes and financing costs

Types of Capital Cost Estimates

Order-of-Magnitude (±50%): Used in early project phases
Preliminary (±30%): Used in conceptual design
Definitive (±10%): Used in final design
Control (±5%): Used during construction

Steps in Capital Cost Estimating

Define project scope
Collect data on materials, labor, and equipment
Breakdown costs (direct, indirect, etc.)
Apply costing methods
Plan for contingencies
Document and review estimates

Methods of Capital Cost Estimation

Unit Cost Estimation: Cost per unit of work
Parametric Estimation: Statistical models
Detailed Estimation: Item-by-item breakdown
Analogous Estimation: Past project comparison

Factors Affecting Estimates

Project complexity
Location and logistics
Market conditions
Regulatory requirements
Technology advancements

Challenges in Cost Estimating

Incomplete project definitions
Limited or outdated data
Market price volatility
Regulatory changes

Conclusion

Capital cost estimating is essential for project planning and execution. It provides engineers with tools to develop accurate estimates, mitigate risks, and ensure project success.

Canon of Ethics for Cost Engineers

Ethics Defined: A concept of morality within a context of cultural values, social norms, professional values, and accepted behavioral standards.
Values: Guiding beliefs that motivate opinions, attitudes, and moral obligations.
Principles: How people ought to behave in a specific situation.
Why Study Ethics: Increased awareness of importance due to publicity surrounding high-profile engineering failures.
Engineers should be aware of the moral implications of their decisions in the workplace.
Ethical considerations are crucial for decisions as these affect public health, safety, business practices, and politics.
Ethical Values Include: Integrity, honesty, fidelity and responsibility.
Fundamental Principles include: Engineers uphold the integrity of the profession by using their knowledge and skills, being honest, serving the public and clients with fidelity, increasing and supporting the prestige of the profession.
Canon 1: Engineers prioritize the public's safety, health, and welfare while strictly adhering to sustainable development principles during professional duties.
Canon 2: Engineers shall perform works only within their areas of expertise and competence.
Canon 3: Engineers should provide public statements with integrity and objectivity, naming the proper person who did the work.
Canon 4: Engineers must act ethically for clients and employers by avoiding conflicts of interest.
Canon 5: Engineers should present their services truthfully and avoid unfair competition with other engineers.
Canon 6: Engineers should uphold honor, integrity, and the dignity of the profession by acting responsibly
Canon 7: Engineers shall maintain their professional development and provide opportunities for those under their supervision.

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Description

This quiz covers the fundamentals of capital cost estimating, crucial for effective project planning and execution. Learn about direct and indirect costs, types of estimates, and essential steps in the estimating process. Enhance your understanding to improve project feasibility and budgeting.