# 英国Project Appraisal专业考试问答题

 解释私营部门项目评估的折现现金流方法。为什么折现是评估投资项目净收益计算的重要组成部分？ Explain the discounted cash flow methods of project appraisal in the private sector. Why is discounting an important component part of the calculations that are made to appraise net benefits of an investment project? 折现现金流量法（以下简称“现金流量法”）主要应用于以货币时间价值为内容的项目评估，特别是对私营部门而言。也就是说，贴现现金流是利用其现值（以下简称“现值”）进行贴现的，该现值是为未来现金流估计而设计的。在对现值的解释中，我们认为所有未来流入和流出的现金流都是净现值（NPV），在私营部门的项目评估应用中，净现值始终以价值或价格的形式存在。在计算DCF下的净现值时，应充分考虑三个因素，即投入现金流量、折现率和产出价格。 Discounted Cash Flows methods (hereinafter called “DCF”) are mainly applied to the project valuation under the contents of the time value of the money especially for the private sector.  Namely, the DCF is discounted to use their Present Value (hereinafter called “PV”), which is designed for the future cash flows estimation. In the explanation of the PV is guided that all future incoming and outgoing cash flow are both Net Present Value (NPV) which is always in the form of the value or price in the application of project appraisal in the private sector. In the calculation of the NPV under the DCF, three factors should fully considered in the question, that is , input cash flow, discounted rates and output price.  折现率是根据加权平均资本成本（以下简称加权平均资本成本）来计算的，加权平均资本成本对现金流量的风险影响很大。此外，折现率可以反映货币时间价值和风险溢价两个组成部分。此外，贴现现金流公式是从未来价值公式中推导出来的，用于计算货币的时间价值和复合回报。The discount rate is applied in the light of the weighted average cost of capital (hereinafter called WACC) which could have the great impact on the risk of the cash flow. In addition, the discounted rate could reflect two components, that is, time value of the money and risk premium. Also, the discounted cash flow formula is derived from the future value formula for calculating the time value of money and compounding returns. As can be seen in the formula, discounting an important component part of the calculations that are made to appraise net benefits of an investment project, the reason is that it is connected to time value of money and compounding returns in the project.   There are three methods; they are Net present value,the internal rate of return, and Benefit-cost ratio.   Net present value (NPV) NPV is the difference between the present value of cash inflows and the present value of cash outflows. It is used in capital budgeting to analyze the profitability of an investment or project.     The internal rate of return (IRR) The internal rate of return (IRR) is a rate of return used in capital budgeting to measure and compare the profitability of investments. In the context of savings and loans, the IRR is also called the effective interest rate. The term internal refers to the fact that its calculation does not incorporate environmental factors (e.g., the interest rate or inflation).   Benefit-cost ratio(BCR) A benefit-cost ratio (BCR) is an indicator, used in the formal discipline of cost-benefit analysis that attempts to summarize the overall value for money of a project or proposal. A BCR is the ratio of the benefits of a project or proposal, expressed in monetary terms, relative to its costs, also expressed in monetary terms. All benefits and costs should be expressed in discounted present values. Explain how changes of working capital are taken into account in the accurate estimation of the Net Cash Flow of a project. The working capital has the close relationship with the current assets and current liabilities. In the contents of the current assets included the items such as cash on hand and account receivable and others; also, the contents of the current liabilities are included the items such as account payable and short-term loan within one year and others. The project can be recorded the working capital as their daily operations. Also, the project could estimate the net cash flow through the working capital between two accounting periods. The relationship can be described as the increase the working capital, the decrease the net cash flow; conversely, the working capital is decreasing, the net cash flow is increasing.    Outline the main stages of a Social Cost-Benefit Analysis (SCBA) with reference to a project appraisal with which you are familiar.   The objective of the SCBA is to determine: 1. Economic benefits of the project in terms of shadow price; 2. The impact of the project on the level of savings and investments in the society; 3. The impact of the project on the distribution of income in the society; 4. The contribution of the project towards the fulfillment of certain irritants (self-sufficiency, employment etc.) There are five stages involved in the SCBA: Case of the environment impact assessment   1. Define the decision; Whether environment impact is a serious problem? 2. Identify and measure the project's impacts; 3. Quantify these impacts into monetary values; 4. Discount future costs and benefits; Individually normally prefer to enjoy the benefit now rather than later, the future value should be discounted  5. Apply decision rue; 6. Allow for risk and uncertainty; 7. Make a recommendation.   Suggest an appropriate methodology to value each of the following project impacts: a) a tourism project that attracts more visitors to a national park b) a highway project that generates increased traffic noise and air pollution in the vicinity of the highway c) a dam project that floods a valley which results in the loss of unique prehistoric archaeological sites. For each impact you should select a different methodology. Your answer should emphasisethe strengths and weaknesses of your chosen methodology in relation to the project impact being discussed.   a) TCM Advantage  Provided the site attractsvisitors from a sufficiently wide range of different locations so that visitorsfrom these various locations incur different travel costs, then these resultingvariations in travel costs and the differences in the rates of visits that theyinduce, provide a basis for estimating a demand curve for that site and theWTP for a visit.   Disadvantage  Data for TCM is expensive tocollect and analyse. Some trips are multi-purpose so TCM may work best forisolated sites (where travel costs are significant and multipurpose journeysare not a problem)   b) Hedonic pricing Advantage  Open spaces such as parks, general open spaces, wetlands and farmlandsprovide a range of external benefits to the residents of communitieslocated alongside such spaces. These include recreational uses, the pleasureof scenic views and the like. The value of such open spaces has beenmeasured by the use of hedonic pricing, again in relation to propertyprices. Disadvantage  The problem with hedonic pricing models is that while they are intuitively helpful tools, they require very large and comprehensive data sets (e.g. on regional property prices, wage differentials) and may be expensive in terms of data collection and econometric modelling capacity. There may also be some difficulties associated with the measurement and establishment of causal relationships. It is assumed that property/land values and wage markets operate efficiently. In developing countries, property markets may be underdeveloped or distorted by government intervention. c) Total economic value Advantage  The total economic value (TEV) of an environmental asset is thesum of the Use Value, the Indirect Value, the Option Value and the Existence Value.   Disadvantage Ecological services such as soil and watershed protection but it are not easy, they suggest, placing a value on these because ofa lack of quantitative studies to provide estimates.#p#分页标题#e# Assess the main strengths and limitations of Social Cost-Benefit Analysis (SCBA) for the project appraisal of public sector investment projects. Use examples from relevant projects to illustrate your analysis. Strength  The cost-benefit analysis for the three forest road projects is based on a special method devised by the Fukui City Public Projects Appraisal Committee. Basically, the benefits of forest roads are considered to include the following. ①Benefits received by producers and consumers due to the increase in lumber production, which is brought about by the construction of forest roads ②Benefits brought by production cost savings in forestry ③Benefits of the good effect, from the environmental conservation aspect, due to the active forestry production activity ④Benefits for community roads ⑤Benefits for securing domestic lumber resources Limitation There is potential value in forests as sources providing wood resources regardless of current market values. This potential value is connected to sustainability and is hard to understand in terms of cost-benefit analysis. It is naturally possible, from the premise of cost-benefit analysis, that consideration of such value may hamper the use of cost-benefit analysis. It seems that there are values to be considered independently from the calculable value of benefit in regulating cumulative harmful chemical substances. This will also be related to sustainability. It may be assumed that there are values that cannot be understood in view of the benefit based on WTP in the environment as a part of public properties. Also, uncertainty in the benefit appraisal itself becomes larger from the long-term standpoint of sustainability of resources or environment. The necessity of applying the estimated WTP to public goods itself also increases the uncertainty of the benefit. These elements reduce the reliability of cost-benefit analysis as a strict quantitative analysis and lower the effectiveness of efficiency criteria to other various values.   Identify and discuss the main issues encountered in the appraisal of large projects (megaprojects). What actions can project analysts and decision makers take to try to prevent or mitigate some of the risks and uncertainties generally attached to such projects? Availability risk, Construction risk, Design risk, Economic,Financial and Business risk, Natural HazardandEnvironment risk, Health risk, Legislative risk, Politicaleconomy risk, Security risk, Technology risk 1.Consulting early; 2.avoiding irreversible decisions 3.carrying out pilot studies building in flexibility from the start taking precautionary action 6 transferring risk through contractual arrangements 8. developing less risky options, such as making less use of cutting-edgetechnologyreinstating or developing different optionsorabandoning a project because it is too risky.   In the megaproject evaluation, you could have three election on the risks: reduce the risk, accept the risk and avoid the risk after the full assessment on the risk. In the analysis, you also consider on the benefit and cost over the project to make the final decisions.  Explain how the techniques of SCBA can be applied to a sector with which you are familiar. Your analysis should emphasize the special problems and difficulties of using the technique in your chosen sector. Environment sector- especially for drinking water There is a wide range of variables that may be relevant to a full social cost–benefit analysis of water and sanitation interventions. Each of these variables may merit itsown row in the social cost–benefit analysis matrix.  Although the variables are expressed as means, counts and proportions in the questions below, it is important to remember that, in practice, the most accurate way to estimate these aggregate measures is to ask households about their most recent experiences and then aggregate those experiences. That is, do not ask a household: What is the average annual number of “x” episodes? But instead ask a number of households: When did you last experience “x”? The population mean can then be estimated by taking the average lapse in time since the last episode and converting this into an annual rate. Also worth noting in terms of data collection, is that many of these variables can be estimated using focus group techniques rather than extensive questionnaire surveys. Estimating lifetime earnings for those lives saved will require judgments to be made on long-term economic change and will be sensitive to the discounting rate over time, given that much of this gain will be far in the future. Considerations of social justice may be significant here in terms of the value of a human life being seen only as the discounted value of future earnings. Also, the impact of greater child survival on future fertility choices may be a significant externality that needs to be incorporated into the demographic model.   Critically assess the limitations of Social Cost-Benefit Analysis (SCBA) in the evaluation of non-economic values in relation to environmental issues and sustainable development, considering particularly: a) the limited consideration given to distributional equity b) its vulnerability to political influence   a)Regarding climate change in particular, critics of the CBA approach argue that discounting poses problems for intergeneration equity because it down-weights the costs to future generations. The fact that CBA is based on monetization of all costs and benefits is another source of criticism. Many things are difficult (or maybe impossible) to monetize, and there are those who feel that somethings are priceless, whereby placing an economic value on them is effectively devaluing. Rights based environmentalist, for example, may believe that polar bears are priceless, and protecting the species is simply the right thing to do, regardless of the costs and benefits. The problem, of course, is that many people have different priorities and often disagree about the right thing to do, and we can only do them all under extremely rare circumstances. When tradeoffs are required, CBA provides a systematic way for evaluating the consequences of choosing a particular alternative. Though we should keep in mind that the systematic approach is based on economic efficiency, and other normative criteria (e.g., equity and ecological sustainability) may have an equal stake in the decision-making process.   b) No technique for analyzing public policy is immune to criticism, and SCBA is no exception. Nevertheless, SCBA is perhaps the most widely applied and influential method of policy analysis. Many countries have specific guidelines for the conduct of regulatory impact analysis, and CBA typically plays a prominent role. In the United States, for example, CBA has been required since 1981 of most new regulations that impose significant costs or economic impacts. The existing statutory requirement is not that policies necessarily pass the cost-benefit test, but that CBA be used as a general accounting framework to highlight the range of impacts of proposed policies. Since 1993, the specific provision has been that the “benefits justify costs.” In this capacity, CBA plays an important role in decision-making about environmental quality and public health at the U.S. Environmental Protection Agency, along with other regulatory agencies. In the end, public policies in all areas of governance impose costs and benefits on members of society. Prudent decision-making requires a clear and systematic understanding of the different impacts, and CBA—appropriately applied as a decision tool rather than a decision rule—provides a useful framework to aid in the process. Other analytical techniques, among which CBA is a useful complement, include cost-effectiveness analysis, multi-criteria analysis, risk assessment, and environmental impact assessment.

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