Cost-benefit analysis : economic and financial appraisal using spreadsheets /: economic and financial appraisal using spreadsheets. (2022)

• Record Type: Book
• Further Information: Note: Harry Campbell, Richard P.C. Brown.
• Authors: Campbell, Harry F, 1945-; Brown, Richard P. C, 1951-
• Contents: List of figures xi List of tables xiv List of examples xvi List of Technical Notes xvii Preface xviii Acknowledgements xxii Introduction to cost-benefit analysis 1 Introduction 1 The Referent Group 6 The structure of the cost-benefit model 8 The use of spreadsheets in cost-benefit analysis 11 The rationale for public projects 14 The role of the analyst 16 Further reading 17 Exercises 17 Project appraisal: principles 19 Introduction 19 Project appraisal from an individual viewpoint 19 Investment opportunities in the economy as a whole 22 The algebra of NPV and IRR calculations 23 Annuities and perpetuities 30 The Rule of 72 34 Economic depreciation and the annual cost of capital 35 Treatment of inflation in project appraisal 36 Incorporating a risk factor in the discount rate 38 Further reading 39 Exercises 39 Project appraisal: decision-rules 40 Introduction 40 Discounted cash flow analysis in practice 40 vi Contents Discounting and the time value of money 41 Using Annuity Tables 44 Using investment decision-making criteria 45 The Net Present Value (NPV) criterion 45 The Benefit-Cost Ratio decision-rule 47 The Internal Rate of Return (IRR) criterion 48 Problems with the IRR decision criterion 51 Problems with the NPV decision criterion 53 Using spreadsheets 59 Further reading 64 Exercises 64 Private cost-benefit analysis: financial appraisal 68 Introduction 68 Benefits and costs measured as cash flows 69 Identifying project inputs and outputs 69 Valuing inputs and outputs at market prices 70 Characteristics of cash flows 70 Inflation and relative prices 72 Incremental or relative cash flows 74 Capital costs and the treatment of depreciation 76 Interest charges, financing flows and cash flow on equity 78 Taxation and after-tax net cash flows 83 The discount rate 84 Summary of the relationship between the Market Analysis and the Private Analysis 85 Derivation of project private cash flows using spreadsheets 85 Appendix to Chapter 4: Case Study of International Cloth Products 91 Further reading 97 Exercises 97 Cost-benefit analysis and economic efficiency 99 Introduction 99 The competitive market 100 Shadow-pricing project inputs and outputs 103 Shadow-pricing marketed inputs 104 Materials 105 Labour 109 Capital 117 Land 118 Rules for shadow-pricing marketed inputs 118 Shadow-pricing marketed outputs 119 Rules for shadow-pricing marketed outputs 124 The efficiency pricing rules: summary 124 Contents vii Corrective taxation: the modified efficiency pricing rules 125 How to determine which pricing rule to follow 126 Shadow-pricing public funds 128 Shadow-pricing foreign exchange 133 The discount rate 133 Worked examples 136 Efficiency analysis of the National Fruit Growers (NFG) Project 136 Cost-benefit analysis of the 55 mph speed limit 140 Appendix to Chapter 5: Economic Efficiency Analysis of the ICP Case Study 142 Further reading 145 Exercises 146 The distribution of project net benefits 149 Introduction 149 How to identify Referent Group net benefits in practice 150 Some examples of the classification of net benefits 154 Shadow-prices on project inputs 154 Shadow-prices on project outputs 160 Corrective taxation 161 Further examples 166 Lessons from the examples 168 Worked example: Referent Group Analysis of National Fruit Growers’ (NFG) Project 168 Appendix 1 to Chapter 6: Referent Group net benefits in the ICP Case Study 171 Appendix 2 to Chapter 6: Incorporating the public funds cost premium in the ICP Case Study 177 Further reading 179 Exercises 180 Consumer and producer surplus in cost-benefit analysis 182 Introduction 182 Real versus pecuniary effects 183 Consumer surplus 184 Aggregating consumer surplus measures 185 The significance of income distribution 186 Producer surplus 186 Accounting for output price changes 186 Benefits of urban transport projects 187 Benefits of worker training 193 Producer benefits from an irrigation project 196 Accounting for input price changes 201 Price changes in other markets 203 Classification of consumer and producer surplus changes 204 viii Contents Appendix 1 to Chapter 7: Allowing for an increase in the skilled wage in the ICP Case Study 206 Appendix 2 to Chapter 7: Compensating and equivalent variation 209 Further reading 215 Exercises 215 Non-market valuation 217 Introduction 217 Causes of market failure 217 V
• Edition: Third edition
• Publisher Details: London : Routledge
• Publication Date: 2022
• Extent: 1 online resource, illustrations (black and white)
• Subjects: 658.1554; Cost effectiveness; Decision making
• Languages: English
• ISBNs: 9781000773798; 9781000773729
• Related ISBNs: 9781032320779; 9781032320755
• Notes: Note: Description based on CIP data; resource not viewed.
• Access Rights: Legal Deposit; Only available on premises controlled by the deposit library and to one user at any one time; The Legal Deposit Libraries (Non-Print Works) Regulations (UK).
• Access Usage: Restricted: Printing from this resource is governed by The Legal Deposit Libraries (Non-Print Works) Regulations (UK) and UK copyright law currently in force.