Implicit capital cost of project investments

We propose a capital cost approach to compute impact of delays on projects costs. One effect of delaying a project completion is to keep some capital innactive. In particular, in the case of high investment or lengthy projects, the marginal capital cost may become significant. Our approach is to compute the opportunity cost of the incurred investment during the delay. This method helps to support decisions during the project execution such as the convenience of a delay and provides a tool to quantify contractor penalties.