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    Cba Cba

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    Minh Nguyet
    This document contains two sections describing potential projects being considered for cost-benefit analysis. The first section describes a proposed eco-tourism development project at Bach Ma National Park in Vietnam. It would include construction of infrastructure, tourist villages, and two cable car routes with the goal of serving 500,000-1,000,000 passengers annually. The second section provides cash flow information over 5 years for a proposed production line installation project by Company ABC. It includes details on capital costs, operating costs, revenue projections, tax rates, and financing to calculate the net present value and determine if the project should be implemented.

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    Cba Cba

    Uploaded by

    Minh Nguyet
    20 views2 pages
    This document contains two sections describing potential projects being considered for cost-benefit analysis. The first section describes a proposed eco-tourism development project at Bach Ma National Park in Vietnam. It would include construction of infrastructure, tourist villages, and two cable car routes with the goal of serving 500,000-1,000,000 passengers annually. The second section provides cash flow information over 5 years for a proposed production line installation project by Company ABC. It includes details on capital costs, operating costs, revenue projections, tax rates, and financing to calculate the net present value and determine if the project should be implemented.

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    CBA CBA

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    CBA CBA

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    This document contains two sections describing potential projects being considered for cost-benefit analysis. The first section describes a proposed eco-tourism development project at Bach Ma National Park in Vietnam. It would include construction of infrastructure, tourist villages, and two cable car routes with the goal of serving 500,000-1,000,000 passengers annually. The second section provides cash flow information over 5 years for a proposed production line installation project by Company ABC. It includes details on capital costs, operating costs, revenue projections, tax rates, and financing to calculate the net present value and determine if the project should be implemented.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    20 views2 pages

    Cba Cba

    Uploaded by

    Minh Nguyet
    This document contains two sections describing potential projects being considered for cost-benefit analysis. The first section describes a proposed eco-tourism development project at Bach Ma National Park in Vietnam. It would include construction of infrastructure, tourist villages, and two cable car routes with the goal of serving 500,000-1,000,000 passengers annually. The second section provides cash flow information over 5 years for a proposed production line installation project by Company ABC. It includes details on capital costs, operating costs, revenue projections, tax rates, and financing to calculate the net present value and determine if the project should be implemented.

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    MIDTERM EXAM

    COST-BENEFIT ANALYSIS FOR PROJECT

    1. Bach Ma National Park is located in Phu Loc district, Thua Thien Hue province, 40km from
    Hue city, 65km from Da Nang. Bach Ma National Park is part of the North Truong Son with peaks
    over 1,000m running horizontally from West to East. Bach Ma National Forest has a total area of
    nearly 37,500 hectares, which is a large primeval forest, with 2373 species of plants and 1715
    diverse species of animals, including many rare species listed in the Red Book of Vietnam.
    The American company Inros Lackner introduced the plan for the construction of Bach Ma eco-
    tourism area. The estimated scale is about 387.8 ha with 2 functional areas. Zone A is the
    infrastructure area of about 97.8 ha (at the foot of the mountain, in Khe Su area, Loc Tri commune,
    Phu Loc district) and zone B is Bach Ma eco-tourism area, which is about 290 hectares. The eco-
    tourism area includes a tourist village at the mountain peak, a heritage tourism village,a central
    village, a spiritual tourist area, a supporting area, a waterfall valley tourist village and a landscape
    area. The consultant Poma Group has also proposed a plan of developing 2 cable car routes for
    Bach Ma. The cable route No. 1 (from the foot of the mountain, Khe Su area to the top of Bach
    Ma), which is 4,027 m in length, including 24 columns, with a maximum capacity of 1,750 guests.
    The cable route No. 2 has a length of 1,603m, from the top of the mountain to the area of Ngu Ho
    waterfall. The project will have the capacity to serve 500,000 passengers/year in the period 2020-
    2030 and 1 million passengers/year after 2030.
    Set 1:
    - Identify the financial revenue and cost of the project (for FA)
    - Identify the stakeholders of the project.
    Set 2:
    - Identify the costs and benefits of the project for CBA, including economic, social and
    environmental costs and benefits.
    2. Company ABC is considering a project of installing a production line for product A. The project
    is expected to last 5 years. The cashflow is as follows:
    1. The production line (fixed asset) costs VND 900 million to purchase and set up initially (year
    0). The working capital is 300 million VND in year 0. The investor borrow will VND 600 million
    from the bank with the annual interest rate of 8% and will repay with the annuity method over 5
    years (from year 1). The equity has an annual expected rate of return of 10%.
    2. At the end of year 2, VND180 million will be invested to upgrade the production line (upgrading
    time is insignificant) and working capital must be increased by VND 80 million.
    3. It is expected that the first and second year of the project will bring the annual revenue of VND
    800 million. In the year 3, 4 and 5, the revenue is VND 1,000 million/year.
    4. Estimated annual production and business costs are as follows:
    - Total fixed business costs (not including depreciation) are VND 100 million.
    - Variable costs equal to 50% of annual revenue.
    5. The fixed asset will be depreciated with straight line method in 5 years. The additional
    investment to upgrade production lines is expected to be depreciated in 3 years with straight line
    method too.
    6. Working capital is expected to be recovered at one time, in the last year of the project.
    7. The corporate income tax rate is 25%.
    Calculate the net present value and indicate whether the company ABC should implement the
    project?

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