On behalf of the Education Department in the State of Kingsland, you are required to undertake and report the findings of a benefit-cost analysis of the PECIP program on a per-participant basis over the expected lifetime of the participants. You should calculate IRRs for the market, private, efficiency and referent group analysis and report NPVs for the referent group on an aggregated and disaggregated basis for the year 2016 (the present year.) In private CBA analysis, there are two parties of interest here a) Education department and b) the program participant and families. You should also conduct and report the results of a sensitivity analysis in which you analyse and comment on, at least, the sensitivity of the results to: (i) the expected earnings of the participant families, and (ii) the assumed value of life in estimating the health benefits. You are encouraged to explore sensitivity to other variables with a view to identifying those that have most impact on the results and that would warrant further investigation. In the base case scenario, you should summarize the results of the Market, Private, Efficiency and Referent Group analyses by calculating and reporting IRRs, with the NPV for the Referent Group reported on an aggregated and disaggregated basis. The State (and Federal) governments use a 5% discount rate (real) for investment decision-making, but are interested in knowing the sensitivity of the results at 3% and 7% discount rates. In the scenario analysis, you are expected to test multiple variables simultaneously in optimistic and pessimistic scenarios. In your report, you should also indicate other omitted costs and benefits that could be of potential significance to the decision-maker. Although the Federal Government is not part of the referent group it is important for the State Government to know what the overall impact of the project is on Federal Treasury finances as they might want to build a case for further concessional loans should it be decided to repeat the PECIP project in the future. Your report should offer advice to State Government in relation to this issue. 8 Assignment Format and Submission Two Files to be submitted: (i) CBA Analysis in Excel Workbook, and; (ii) CBA Report in PDF i) Excel Workbook In constructing your CBA spreadsheets you are required to use the template Excel Workbook downloadable from Blackboard. You should not change the structure of the template tables in the spreadsheets unless requested by an instructor to do so. NO ADDITIONAL EXCEL FILES SHOULD BE SUBMITTED. You are required to enter your name and student ID number in the space provided at the top of the worksheet in the template Excel Workbook. You may submit only one Excel Workbook file, containing all relevant spreadsheets should be formatted in landscape in normal view, and left unlocked so all calculations can be checked. Your Excel file must be named: ECO_[your family name]_[your student ID number] ii) CBA Report Your written report should not be more than 10 pages in length, including the Executive Summary and tables. It should be on A4 size pages (portrait orientation only) in PDF format, 12-point Times New Roman font, 1.5 spacing, 2.5 margins on all sides. Penalties apply for excessive length. The report should provide a Front Page containing name, student number, etc. This is not included in the page limit. The Report should begin with the Executive Summary of no more than one page. Results of the base case analyses should be reported in summary tables included in the text, and where necessary, in more detailed tables in an Appendix (not included in 10 pages). Do not attach copies of spreadsheets (e.g. in PDF) to your main report, although sections showing summary results can be cut-and-pasted into the report.
You should calculate IRRs for the market, private, efficiency and referent group analysis and report NPVs for the referent group on an aggregated and disaggregated basis for the year 2016