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Economic Evaluation Assignment

Evaluation of financial and economic viabilities of two project proposals.

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Added on  2023-03-29

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This document provides a summary of the results and recommendations for an economic evaluation assignment. It includes a table with financial and economic data for two proposals, as well as answers to questions related to the evaluation. The document also discusses the impact of factors such as consumer surplus, opportunity cost of money, changes in demand, hyperinflation, and market transformation on the recommendations. Additionally, it calculates the subsidy required for Proposal B to sell electricity at competitive market prices throughout the project duration.

Economic Evaluation Assignment

Evaluation of financial and economic viabilities of two project proposals.

   Added on 2023-03-29

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Name:
Student #:
49003 ECONOMIC EVALUATION
Assignment #2 (Autumn 2019)
Due: 3June 2019
ANSWER-SHEET
Please summarize your results in the table below: (9Marks)
Financial Economic
Proposal A Proposal B Proposal A Proposal B
NPV -131.37 -131.37 6552.39 12074.66
IRR -0.03% -0.03% 1.74% 3.09%
PB 40 Years 40 Years 8 Years 7.5 Years
B/C 99.74% 99.78% 113.11% 120.15%
Life Cycle Cost 100000 100000 100000 160000
Equivalent Annual Cost 1666.67 1666.67 1666.67 2666.67
Consumer Surplus 120000 120000 120000 135000
Producer Surplus 240000 240000 180000 210000
Total Surplus 360000 360000 300000 345000
Deadweight Loss 20000 20000 20000 60000
Note: NPV; Equivalent Annual Cost;Life Cycle Cost; and Surpluses (Consumer, Producer, and
Total)and Deadweight Loss - must be rounded off to the nearest billion dollars (i.e., no decimals),
and IRR and PB -to the nearest ‘whole’ percents and years (i.e., no decimals), and B/C - to one
decimal point only.
1. Which proposal will you recommend from investor’sperspective? (2Marks)
A B Either Neither
Why? Because the proposal B is having more economic and social benefits as compared to the
proposal A
49003-Assign2A2019-answer template Page 1 of 3
Economic Evaluation Assignment_1

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