Assignment MO PGPM 22

8/3/2019 Assignment MO PGPM 22

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Assignment for PGPM 21

1. INTRODUCTION

Project Formulation and Appraisal play a critical role in entrepreneurship

development and enterprise creation. Most rejections and failures of project

proposals are due to improper business planning. Varying appraisal methods and

project formats (varying from bank to bank and financial institution to financial

institution) compound the complexity. Formulating viable project reports for small,

micro, village and cottage industry is a fine art requiring skills different from what is

needed in case of large and medium enterprises. Though a good project report is

the heart of entrepreneurship, potential entrepreneurs lack formulating skills and

their trainerpromoters, knowledge of training/consulting methods. Even

experienced trainers/consultants are often unclear on the treatment required fordifferent projects: industry, service or business.

Project Analysis is done to Estimate, Compare, and Rank the project net benefits

among different alternatives with budget constraints. Project appraisal is a generic

term that refers to the process of assessing, in a structured way, the case for

proceeding with a project or proposal. In short, project appraisal is the effort of

calculating a project's viability. It often involves comparing various options, using

economic appraisal or some otherdecision analysis technique. The economic and

financial appraisals (ex-anti evaluation) are considered to be the most important

tools for helping decision maker to choose or select.

2. WHAT IS A PROJECT?

"A project is a group of activities which can be planned, financed (funded),

implemented, and analyzed as a unit".

In project management, a project consists of a temporary endeavor undertaken to

create a unique product, service or result. Another definition is a management

environment that is created for the purpose of delivering one or more business

products according to a specified business case.

Project objectives define target status at the end of the project, reaching of which is

considered necessary for the achievement of planned benefits. They can be

formulated as SMART criteria: Specific, Measurable (or at least evaluable)

achievement, Achievable (recently Agreed-to or Acceptable are used regularly as

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well), Realistic (given the current state of organizational resources) and Time

terminated (bounded). The evaluation (measurement) occurs at the project closure.

However a continuous guard on the project progress should be kept by monitoring

and evaluating. It is also worth noting that SMART is best applied for incremental

type innovation projects. For radical type projects it does not apply as well. Goals

for such projects tend to be broad, qualitative, stretch/unrealistic and success

driven.

The project in general includes the following factors

(a) OutflowsAlso known as; inputs, resources, costs or investments

(b) InflowsAlso known as: output, production, benefits or revenues.

(c) Life span of the projectThe time or the life of the project. It is a specific activity(ies) with a specificstarting point and specific ending point intended to accomplish a specificobjective(s).

(d) A spaceA geographical location or a place with a boundary forming the project space

(e) The managementThe administrative structure, the individuals (coop., corp., entities) and theparticipants.

It is better to keep the project close to the minimum size that is economically,technically, and administratively feasible

3. THE PROJECT CYCLE

The project cycle comprises of (i) Project Identification, (ii) Project Preparation or

Formulation (feasibility studies), (iii) Project Appraisal (Ex-ante Evaluation), (iv)

Project Implementation, and (v) Project Evaluation (Ex-post Evaluation).

(i) Project Identification

Any project starts with an idea, which leads the identification of the relationship

between the idea and the sector plan, then with the national plan as a whole which

also includes the identification of the opportunity cost of the alternative investments

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(ii) Project Preparation or Formulation (feasibility studies)

This stage includes the different feasibility studies such as:

(a) Technical feasibility

(b) Commercial feasibility (marketing study)

(c) Financial feasibility

(d) Economic feasibility, and etc.

This stage ends with a project report

(iii) Project Appraisal (Ex-ante Evaluation)

It includes economic, financial, and social evaluation for the project before its

implementation to have enough understanding whether the project is feasible or

not.

(iv) Project Implementation

This stage includes observing the project scheduling, supervising, and control the

different stages. Also to record what has happened in each stage of the project

implementation (project reporting, or sometime known as follow up reports).

(v) Project Evaluation (Ex-post Evaluation)

It includes the financial, economic, and social evaluation after the project is

implemented. The difference between Stages 3 and 5 (even the used measures

are the same) is that: in stage 3 (the Appraisal stage) is estimated but stage 4 is

what actually happened (The Evaluation Stage).

4. ASSESSMENT AND APPRAISAL OF A PROJECT

The following are the common steps for the Assessment and Appraisal of any

project

Identify the project costs and benefits

Quantify the project costs and benefits

Conduct a cost-benefit analysis

Assess the economic and financial feasibility of the project by estimating the

various profitability indicators of the project

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Conduct sensitivity analysis scenarios, whenever needed.

Accept or reject a project or a set of project according to a set of choice

criteria

The two techniques for the assessment and appraisal of the projects are (i) Non-

Discounted Technique and (ii) Discounted Technique.

(i) Non-Discounted Technique

Non-discounted technique of Capital Budgeting refers to the technique or method

of investment decision where it is considered that there is no change in the price

level between the initial investment made and the date of last return from the

investment. Under this technique, the future value of money is considered at the

current value.

The non-discounted techniques are as follows:-

(a) Pay Back Period (PBP) Method

Pay Back Period refers to the period (generally number of years) of an investment

project proposal at which the firm expects to recover its initial investment to the

project proposal. Alternatively the PBP is the period at which the total cash inflow

from a project equals to the initial investment (i.e. cash outflows) made to theproject.

Computation of PBP

(i) When the Cash Inflows After Tax (CFAT) are constant every year

PBP = Initial Investment / Constant CFAT per annum

(ii) When CFAT are not constant every year, the following steps are to be

followed :

Step 1:- Calculate the CFAT of each year

Step 2:- Compute the cumulative CFAT

Step 3:- The time (i.e. year) when the cumulative CFAT becomes equal to

the initial investment would be the PBP or else, use the method of

interpolation.

Under this method, the project having the shortest PBP should be undertaken

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(b) Pay Back Profitability Method

Pay Back Profitability is the amount of cash flows earned from a project after its

Pay Back Period. Alternatively, it is the excess of cash inflows from a project over

the initial investment into the project. It represents the net cash inflows from the

project proposal.

Computation of Pay Back Profitability(i) When (CFAT) are constant every year

Pay Back Profitability = (Expected life of the project PBP) x CFAT

(ii) When CFAT are not constant every year

Pay Back Profitability = Total CFAT Initial Investment

(c) Average Rate of Return (ARR) Method

ARR is the method ofinvestment appraisal which determines return on

investment by totaling the cash flows (over the years for which

the money was invested) and dividing that amount by the numberof years.

The average rate of return does not assure that the cash inflows are the

same in a given year; it simply guarantees that the return averages out to

the average rate of return.

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Average Investment =Original Investment - Salvage Value

2+ Salvage Value

Average Investment =Original Investment + Salvage Value

2

Average Annual Profit =Total of after Tax Profit of all the year

No. of yearsx 100

ARR =Average annual Profit after Tax

Average Investment x 100


This method is based on accounting information rather than cash flows.

There are various ways of calculating Average Rate of Return. It can be

calculated as:-

If working Capital is also required in the initial year of the project, the

average investment will be= Net working Capital + Salvage value + (initial

cost of Machine- Salvage Value).

In another method instead of average investment original cost is used.

In this method, to evaluate the project all those projects are accepted on

which average rate of return is more than the predetermined rate. Thus, the

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project is given more significant on which the average rate of return is the

highest.

Acceptance Rule

Accept if ARR > minimum rate.

Merits

1) Easy to understand. Necessary information to calculate average rate

of return are available easy.

2) This method takes into account all the profits during the life time of

the project, whereas pay back period ignores the profits accruing after

the pay back period.

3) Give more weightage to future receipts.

4) Easy to understand and calculate.

5) Uses accounting data with which executives are familiar.

Demerits

1) Ignore the time value ofmoney.

2) Does not use cash flow.

3) No objective way to determine the minimum acceptable rate ofreturn.

4) This method does not account for the profits arising on sale of profit

on old machinery on replacement.

5) ARR method does not consider the size of investment for each

project. It may be time that the competing ARR of two projects may

be the same but they may require different average investments. It

becomes difficult for the management to decide which project should

be implemented.

(ii) Discounted Technique

Discounted Technique is a method of investment analysis in which anticipated

future cash income from the investment is estimated and converted into a rate of

return on initial investment based on the time value of money. In addition, when a

required rate of return is specified, a net present value of the investment can be

estimated.

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The discounted techniques are as follows:-

(a) Discounted Pay Back Period (PBP) Method

The discounted payback period is the amount of time that it takes to cover

the cost of a project, by adding positive discounted cash flowcoming from

the profits of the project.

In investment decisions, the number of years it takes for an investment to

recover its initial cost after accounting forinflation, interest, and other

matters affected by the time value of money, in order to be worthwhile to

the investor. It differs slightly from the payback period rule, which only

accounts forcash flows resulting from an investment and does not take into

account the time value of money. Each investor determines his/her own

discounted payback period rule and, as such, it is a highly subjective rule. In

general, however, short-term investors use a short number of years, or even

months, for their discounted payback period rules, while long-term investors

measure their rules in years or even decades.

(b) Profitability Index (PI) Method

Profitability Index (PI) is the ratio of the Present Value (PV) of the total cash

inflows from a project and the PV of the total cash outflows for the project. PI

is also called the benefit-cost ratio.

PI = PV of total cash inflowsPV of total cash outflows

If PI is less than 1, accept the project proposal,

If PI is greater than 1, reject the project proposal

If PI is equal to 1, the management may be indifferent in accepting or

rejecting the project proposal. Generally the project proposal is rejected in

such a case as the firm does not get the net benefit from it.

(c) Net Present Value (NPV) Method

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Net Present Value (NPV) is the difference between the PV of the total cash

inflows from a project and the PV of the total cash outflows for the

project.

NPV = Total of PV of cash Inflows - Total of PV of cash outflows

(i.e., the total of discounted cash inflows - the total of discounted cash

outflows

Following steps are to be followed for determining the NPV:

Step 1: Calculate the CFAT of each year

Step 2: Multiply the CFAT of each year by the respective PV factor and get

the discounted CFAT or PV of CFAT.

Step 3: Compute the cumulative discounted CFAT

Step 4: Compute the PV of cash outflows.

Step 5: Calculate the NPV by deducting the PV of the total cash outflows

from the PV of the total cash inflows.

Decision-Making Criterion

i. In case of a single project proposal, accept it if NPV > 0; else

reject it.ii. In case of two mutually exclusive project proposals, accept the

project having the higher NPV.

(d) Internal Rate of Return (IRR) Method

Internal Rate of Return (IRR) is the rate of return which equates the PV of

the total cash inflows with the PV of the total cash outflows. Therefore, IRR

is the rate of return (i.e. the discounting factor) which makes the NPV zero.

At the IRR, PV of total cash inflows = PV of total cash outflows

Hence, PI = 1.

Decision-Making Criterion

iii. In case of a single project proposal, accept it if the IRR

exceeds the cost of capital.

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iv. In case of two mutually exclusive project proposals, accept the

project having the higher IRR.

ASSUMING THE FOLLOWING HYPOTHETICAL WATER RESERVOIR PROJECT

A water reservoir project to irrigate agricultural land that used to be in rain fed was

designed. The estimated costs and benefits of the project in millions of US $ are displayed

in Table 1.

The task is to calculate the project NPV, BCR at 10% Discounted rate. In addition, we

need to determine the project IRR.

Table 1: The annual estimated costs and benefits for the project

Year Investment O&M Total Cost Benefits($) ($) ($) ($)1 15.00 2.00 17.00 5.002 10.00 2.50 12.50 8.003 10.00 3.00 13.00 11.004 0.00 5.00 5.00 15.005 0.00 5.00 5.00 15.006 12.00 5.00 17.00 10.007 0.00 5.00 5.00 15.008 0.00 5.00 5.00 15.009 0.00 5.00 5.00 15.0010 0.00 5.00 5.00 15.00

Total 47.00 42.50 89.50 124.00

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Solution :-

Table 2: The Project NPC and BCR as 10% Discount Rate

Year Investment O&M TotalCost

Benefits DF D Cost DBenefit

NPV

($) ($) ($) ($) 10% ($) ($) ($)

1 15.00 2.00 17.00 5.00 0.909091 15.45 4.55

-

10.9

0

2 10.00 2.50 12.50 8.00 0.826446 10.33 6.61 -3.723 10.00 3.00 13.00 11.00 0.751315 9.77 8.26 -1.514 0.00 5.00 5.00 15.00 0.683013 3.42 10.25 6.835 0.00 5.00 5.00 15.00 0.620921 3.1 9.31 6.216 12.00 5.00 17.00 10.00 0.564474 9.6 5.64 -3.967 0.00 5.00 5.00 15.00 0.513158 2.57 7.70 5.138 0.00 5.00 5.00 15.00 0.466507 2.33 7.00 4.679 0.00 5.00 5.00 15.00 0.424098 2.12 6.36 4.24

10 0.00 5.00 5.00 15.00 0.385543 1.93 5.78 3.85

Tot

al 47.00 42.50 89.5 124.00 60.62 71.4610.8

4

Benefit Cost Ratio = 71.46 / 60.62 = 1.179

NPV = 10.84




NPV

($) ($) ($) ($) 20% ($) ($) ($)

1 15.00 2.00 17.00 5.00 0.833333 14.17 4.17

-

10.0

0

2 10.00 2.50 12.50 8.00 0.694444 8.68 5.56 -3.123 10.00 3.00 13.00 11.00 0.578704 7.52 6.37 -1.154 0.00 5.00 5.00 15.00 0.482253 2.41 7.23 4.825 0.00 5.00 5.00 15.00 0.401878 2.01 6.03 4.026

12.00 5.00 17.00 10.00 0.3348985.69 3.35 -2.34

7 0.00 5.00 5.00 15.00 0.279082 1.40 4.19 2.798 0.00 5.00 5.00 15.00 0.232568 1.16 3.49 2.339 0.00 5.00 5.00 15.00 0.193807 0.97 2.91 1.94

10 0.00 5.00 5.00 15.00 0.161506 0.81 2.42 1.61Tot

al 47.00 42.50 89.5 124.00 44.82 45.72 0.90


NPV = 0.90

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NPV

($) ($) ($) ($) 30% ($) ($) ($)1 15.00 2.00 17.00 5.00 0.769231 13.08 3.85 -9.232 10.00 2.50 12.50 8.00 0.591716 7.4 4.73 -2.673 10.00 3.00 13.00 11.00 0.455166 5.92 5.01 -0.914 0.00 5.00 5.00 15.00 0.350128 1.75 5.25 3.505 0.00 5.00 5.00 15.00 0.269329 1.35 4.04 2.696 12.00 5.00 17.00 10.00 0.207176 3.52 2.07 -1.457 0.00 5.00 5.00 15.00 0.159366 0.8 2.39 1.598 0.00 5.00 5.00 15.00 0.122589 0.61 1.84 1.239 0.00 5.00 5.00 15.00 0.094300 0.47 1.41 0.94

10 0.00 5.00 5.00 15.00 0.072538 0.36 1.09 0.73Tot

al 47.00 42.50 89.5 124.00 35.26 31.68-

3.58


NPV = -3.58

Table 5: INTERNAL RATE OF RETURN



NPV

($) ($) ($) ($) 21.40% ($) ($) ($)

1 15.00 2.00 17.00 5.00 0.823723 14 4.12 -9.882 10.00 2.50 12.50 8.00 0.67852 8.48 5.43 -3.053 10.00 3.00 13.00 11.00 0.558913 7.27 6.15 -1.124 0.00 5.00 5.00 15.00 0.460389 2.3 6.91 4.615 0.00 5.00 5.00 15.00 0.379233 1.9 5.69 3.796 12.00 5.00 17.00 10.00 0.312383 5.31 3.12 -2.197 0.00 5.00 5.00 15.00 0.257317 1.29 3.86 2.578 0.00 5.00 5.00 15.00 0.211958 1.06 3.18 2.129 0.00 5.00 5.00 15.00 0.174595 0.87 2.62 1.75

10 0.00 5.00 5.00 15.00 0.143818 0.72 2.16 1.44Tot

al 47.00 42.50 89.5 124.00 43.20 43.24 0.04


NPV = 0.04

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INCREASING THE DIMENSIONS OF PROJECTS FEASIBILITY AND APPRAISAL

The following issues are becoming increasingly crucial factors in assessing and

determining the feasibility of a project or a set of projects

1. The environmental impact of the project

2. The interdependencies among projects

3. Fund limitations (Capital Constraint)

From scenic beauty and recreational opportunities to direct inputs into the production

process, environmental resources provide a complex set of values to individuals and

benefits to society. Coastal areas, for example, offer scenic panoramas and radiant

sunsets. Fish and other edible sea life caught in coastal areas provide a rich and nutritious

source of food to consumers. Beaches are also excellent recreation areas, used for

relaxation, exercise, or bird watching. These are only the direct benefits. There are also

values that are not directly tied to use, such as climate modulation, physical protection,

and stewardship for future generations. All of these benefits are relevant in environmental

valuation.

Environmental Values

Use values, such as fishing and hiking, are the more direct and quantifiable category of

environmental values, but they capture only a portion of the total economic value of an

environmental asset. Indirect-use values, non-use values, and intrinsic values are also

associated with preserving environmental resources. Total economic value is represented

by the following equation:

Total economic value = direct-use value + indirect-use value + non-use value + intrinsic

value

Indirect-use values associated with coastal areas include biological support, physical

protection, climate modulation, and global life support. Non-use values are less direct, less

tangible benefits to society and include option and existence values. The option value is

the value an individual places on the potential future use of the resource, for example,

benefits a beach would offer during future trips to the coastal area. Existence values

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include bequest, stewardship, and benevolence motives. Bequest value is the satisfaction

gained through the ability to endow a natural resource on future generations. The

stewardship motive is derived from an altruistic sense of responsibility toward the

preservation of the environment and a desire to reduce environmental degradation. The

benevolence motive reflects the desire to conserve an environmental resource for

potential use by others. Finally, the intrinsic value of nature reflects the belief that all living

organisms are valuable regardless of the monetary value placed on them by society.

It is important to note that there are certain environmental assets that are absolutely

essential to the support of animal life, and that the total value of these assets is not

definable. Marginal changes, however, in the productivity and security of even

irreplaceable environmental assets (e.g., the degradation of part of a large ecosystem or

environmental resources essential to human life) can be captured in terms of total

economic value. For example, the total economic value of air and water quality are

immeasurably large because extreme degradation of either would result in irreversible and

catastrophic damage to the capacity of this planet to support human and other life.

However, we can observe the finite value that society places on small losses of even

those assets that are absolutely essential for sustaining life. For instance, society has

proven willing to accept some degradation of air quality to improve the efficiency and

convenience of transportation. In this particular example, individual choices are not a good

indicator of the value of air quality since most of the costs of reduced air quality are

externalized or passed on to others

Methods for Valuing the Environment

Environmental valuation is largely based on the assumption that individuals are willing to

pay for environmental gains and, conversely, are willing to accept compensation for some

environmental losses. The individual demonstrates preferences, which, in turn, place

values on environmental resources. That society values environmental resources is

certain; monetizing the value placed on changes in environmental assets such as coastal

areas and water quality is far more complex. Environmental economists have developed a

number of market and non-market-based techniques to value the environment. Figure 2

presents some of these techniques and classifies them according to the basis of the

monetary valuation, either market-based, surrogate market, or non-market-based.

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Figure 2. Environmental Valuation Methods

Market-Based Methods Economists generally prefer to rely on direct, observable market

interactions to place monetary values on goods and services. Markets enable economists

to measure an individual's willingness to pay to acquire or preserve environmental

services. In turn, consumers reveal their preferences through the choices they make inallocating scarce resources among competing alternatives. There are a number of market-

based methods of environmental valuation. This article identifies and discusses three

market-based techniques: a) factor of production approach, b) change in

producer/consumer surplus, and c) examination of defensive expenditures.

The value of a natural resource can be monetized based on its value as a factor of

production. An Economic View of the Environment notes that the output of any firm is a

function of several important inputs (e.g., land, capital, natural resources), which are

collectively known as "factors of production." In their role as factors of production, raw

materials and environmental inputs are used in the production of other goods. When a

natural resource has direct value as a factor of production and the impact of

environmental degradation on future output of that resource can be accurately measured,

the resultant monetary value of the decline in production or higher cost of production can

be measured. For example, a decline in water quality could have a direct and detrimental

impact on the productivity and health of shellfish beds. This technique is methodologically

straightforward; however, it is limited to those resources that are used in the production

process of goods and services sold in markets. Because many goods and services

produced by the environment are not sold in markets, the factor of production method

generally fails to capture the total value of the resource to society.

A final market-based valuation method is that ofdefensive expenditures, which are

made on the part of industry and the public either to prevent or counteract the adverseeffects of pollution (Feather 1995) or other environmental stressors. The defensive

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expenditures method, also known as the averting behavior approach, monetizes an

environmental externality by measuring the resources expended to avoid its negative

impacts on a surrounding community. Types of defensive expenditures include water

purification devices, beach nourishment, and replanting seagrasses.

Surrogate Market Methods. In the absence of clearly defined markets, the value of

environmental resources can be derived from information acquired through surrogate

markets. The most common markets used as surrogates when monetizing environmental

resources are those for property and labor. The surrogate market methods discussed

below are the hedonic price method and the travel cost method, with a brief look at the

use of random utility models for environmental valuation.

The hedonic price method of environmental valuation uses surrogate markets for placing

a value on environmental quality. The real estate market is the most commonly used

surrogate in hedonic pricing of environmental values. Air, water, and noise pollution have

a direct impact on property values. By comparing properties with otherwise similar

characteristics or by examining the price of a property over time as environmental

conditions change and correcting for all non-environmental factors, information in the

housing market can be used to estimate people's willingness to pay for environmentalquality.

The travel cost method is employed to measure the value of a recreational site by

surveying travelers on the economic costs they incur (e.g., time and out-of-pocket travel

expenses) when visiting the site from some distance away. These expenditures are

considered an indicator of society's willingness to pay for access to the recreational

benefits provided by the site.

Non-Market Methods. The Contingent Valuation Method (CVM) is a non-market-based

technique that elicits information concerning environmental preferences from individuals

through the use of surveys, questionnaires, and interviews. When deploying the

contingent valuation method, the examiner constructs a scenario or hypothetical market

involving an improvement or decline in environmental quality. The scenario is then posed

to a random sample of the population to estimate their willingness to pay (e.g., through

local property taxes or utility fees) for the improvement or their willingness to acceptmonetary compensation for the decline in environmental quality. The questionnaire may

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take the form of a simple open-ended question (e.g., how much would you be willing to

pay) or may involve a bidding process (e.g., would you accept $10, would you accept $20)

or take-it-or-leave-it propositions. Based on survey responses, examiners estimate the

mean and median willingness to pay for an environmental improvement or willingness to

accept compensation for a decline in environmental quality.

Conclusion

Environmental valuation techniques are primarily driven by the principle that individuals

are self-interested and demonstrate preferences that form the basis of market interactions.

These market interactions demonstrate how individuals value environmental goods and

services. The market-based nature of economic theory emphasizes the maximization of

human welfare. The market, in turn, determines resource allocation based on the forces of

supply and demand.

The environment, thus, is used as an instrument to achieve human satisfaction. In turn,

the environment can be treated like any other commodity and its associated value can be

broken down into many elements. For example, the value of coastal areas could be

theoretically quantified based on the value of the products it offers (e.g., fish, crabs, clams,

recreation, and bird watching). In this manner, environmental valuation can be viewed asa mechanistic approach in which the total value of an environmental system is assessed

in terms of the value of its individual parts.

Existence values are not demonstrated in the marketplace and are at least somewhat

based on unselfish motives making them problematic to environmental analysts. To

quantify existence values accurately within the framework of environmental valuation is

difficult. Revealed preference methods (e.g., travel cost method and hedonic pricing

methods) measure the demand for the environmental resource by measuring the demand

for associated market goods. Existence values are not adequately captured using these

methods. Existence values are only revealed through surveys of individual willingness to

pay for the environmental resource or willingness to accept compensation for

environmental losses.

THE FINANCIAL \ ECONOMIC ACCEPTANCE CRITERIA

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1) Net Present Value (NPV):One project

accept if NPV >= 0

Many project (set of projects)Most to least NPV values to rank project

choose until budget is exhausted.

2) Benefit to Cost Ratio (BCR)One project

accept if BCR >= 1

Many project (set of projects)Most to least BCR values to rank project

choose until budget is exhausted.

FORMAL DECISION TREE FOR ACCEPTING PROJECTS

(INDEPENDENT Vs. DEPENDENT)

Decision State ofDependence

Constraint Criterion

Accept One Project NPV > 0Accept One of

Several Projects

Maximize NPV

Accept few of manyprojects

Independent Capital Constraint Rank by BCR

No Capital Constraint Rank by NPV > 0

Dependent Capital Constraint Find feasible setsmaximize NPV given

your budget constraintNo Capital Constraint Find possible sets

maximize NPV (all

projects with NBV >=Zero)

P 18 f 18

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