ASSIGNMENT EMCA5103

JANUARY SEMESTER 2013 EMCA5103 - PROJECT COST ANALYSIS AND APPRAISAL ASSIGNMENT

INSTRUCTIONS TO CANDIDATES: Answer both questions. Present and structure your answers in the form of a critically-analysed case report (ie. with introduction, issues and problems at hand, analysis, conclusion/recommendation, citations and references). You may support your answers with appropriate illustrations and examples. Citations and References should follow the APA style. Your case report for each question should be about 2,000 words. Format: A4 paper, Times New Roman 12, 1.5 spacing, comb-bound document with plastic covers on both sides Write your name and student no. on the front cover.

ASSIGNMENT QUESTIONS Question 1

The Economic Planning Unit of the Prime Ministers Department has been directed to conduct an economic feasibility study of a new super highway linking the west coast to the east coast of Malaysia project. You are required to discuss the social benefits and costs of the project from both the tangible and intangible perspective of economic analysis.

[50 marks]

ASSIGNMENT EMCA5103

Question 2 The State Government Sarawak has received six proposals to build bank-side reservoirs to store water pumped from the Rejang River, which at 640km, is the longest river in Malaysia. An independent consulting agency has prepared the following Benefit-Cost Analysis:

Bank-Side Reservoir Project A Project B Project C Project D Project E Project F

Benefit (RM) 50,000,000 40,000,000 40,000,000 20,000,000 25,000,000 25,000,000

Cost (RM) 30,000,000 20,000,000 30,000,000 30,000,000 20,000,000 30,000,000

You are required to prepare a Report to the State Government, addressing specifically the following issues:

i) ii) iii)

Formulate the Benefit-Cost Matrix for each Bank- Side Reservoir Project. [8 marks] Which reservoir should be built based on the optimal sized budget? [8 marks] Find the number of reservoirs that need to be constructed if the budget constraints were limited to RM30,000,000. [8 marks] If the reservoirs, Projects C, D, E and F were substitutes, which reservoir should be built? [8 marks]

iv)

v)

Analyse critically THREE (3) issues that needs to be taken into consideration when employing the fundamental principle of Benefit-Cost Analysis in choosing among different projects. Your detailed answer should be supported by appropriate examples. [18 marks] [TOTAL: 50 MARKS]