Monday, November 5, 2018
PROJECT ANALYSIS AND EVALUATION-ASSIGNMENT ON Cost Benefit Analysis
(a)
What do you understand by Cost Benefit Analysis?
(b)
Omoboriowo provides the following data from a project as shown in the
table below:
Year
|
Cost
|
Benefit
|
Discount Factor@8%
|
NPV of Cost
|
NPV of Benefit
|
1
|
40,000
|
0
|
0.926
|
|
|
2
|
30,000
|
15,000
|
0.857
|
|
|
3
|
20,000
|
30,000
|
0.793
|
|
|
4
|
20,000
|
60,000
|
0.735
|
|
|
5
|
15,000
|
90,000
|
0.681
|
|
|
Total
|
|
|
Required:
i. Copy and complete the table above.
ii. Calculate Net Benefit
iii. Calculate Cost Benefit Ratio
iv. Calculate Benefit Cost Ratio
v. Calculate Net Cost if the total benefit reduced by 30%.
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