Chapter Contents:

• 6.1 Base cost estimate and contingencies
• 6.1.1 Physical contingency
• 6.1.2 Price contingency
• 6.2 Interest during construction
• 6.3 Sunk costs
• 6.4 Depreciation and interest charges
• 6.5 Financial projections
• 6.5.1 Financial performance and financial statements
• 6.5.2 Financial ratios
• 6.5.3 Flow of the funds statement: sources and applications of funds
• 6.6 Evaluation of benefits in the electricity supply industry
• 6.7 Timing of projects
• 6.8 Dealing with projects with different lives and construction periods
• 6.9 Expansion projects
• 6.10 System linkages (system effects)
• References