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项目管理之路2
6. Economic Evaluation of Facility Investments
6.1 Project Life Cycle and Economic Feasibility
Facility investment decisions represent major commitments of corporate resources and have serious consequences on the profitability and financial stability of a corporation. In the public sector, such decisions also affect the viability of facility investment programs and the credibility of the agency in charge of the programs. It is important to evaluate facilities rationally with regard to both the economic feasibility of individual projects and the relative net benefits of alternative and mutually exclusive projects.
This chapter will present an overview of the decision process for economic evaluation of facilities with regard to the project life cycle. The cycle begins with the initial conception of the project and continues though planning, design, procurement, construction, start-up, operation and maintenance. It ends with the disposal of a facility when it is no longer productive or useful. Four major aspects of economic evaluation will be examined:
1. The basic concepts of facility investment evaluation, including time preference for consumption, opportunity cost, minimum attractive rate of return, cash flows over the planning horizon and profit measures.
2. Methods of economic evaluation, including the net present value method, the equivalent uniform annual value method, the benefit-cost ratio method, and the internal rate of return method.
3. Factors affecting cash flows, including depreciation and tax effects, price level changes, and treatment of risk and uncertainty.
4. Effects of different methods of financing on the selection of projects, including types of financing and risk, public policies on regulation and subsidies, the effects of project financial planning, and the interaction between operational and financial planning.
It is important to distinguish between the economic evaluation of alternative physical facilities and the evaluation of alternative financing plans for a project. The former refers to the evaluation of the cash flow representing the benefits and costs associated with the acquisition and operation of the facility, and this cash flow over the planning horizon is referred to as the economic cash flow or the operating cash flow. The latter refers to the evaluation of the cash flow representing the incomes and expenditures as a result of adopting a specific financing plan for funding the project, and this cash flow over the planning horizon is referred to as the financial cash flow. In general, economic evaluation and financial evaluation are carried out by different groups in an organization since economic evaluation is related to design, construction, operations and maintenance of the facility while financial evaluations require knowledge of financial assets such as equities, bonds, notes and mortgages. The separation of economic evaluation and financial evaluation does not necessarily mean one should ignore the interaction of different designs and financing requirements over time which may influence the relative desirability of specific design/financing combinations. All such combinations can be duly considered. In practice, however, the division of labor among two groups of specialists generally leads to sequential decisions without adequate communication for analyzing the interaction of various design/financing combinations because of the timing of separate analyses.
As long as the significance of the interaction of design/financing combinations is understood, it is convenient first to consider the economic evaluation and financial evaluation separately, and then combine the results of both evaluations to reach a final conclusion. Consequently, this chapter is devoted primarily to the economic evaluation of alternative p