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1.

Cost / benefit analysis


1. Identifying and defining investment objectives, including specifying the
reporting period
The Ministry of Education, Research and Innovation is the owner of the objective
being the administration holding UASVM explicit evidence regarding ownership and land
and facilities through a concession contract (contract no.124 of 03.03.2004, between
University and Agency DomainsState, in lieu of property provisions in their relations with
institutions of opinion and control the work carried out by it).
The application is in order to achieve a transfer center for composting biodegradable
debris by composting.
All these functions are to be included in a center specifically designed for territorial
cooperation with the Republic of Moldova through the State Agrarian University of
Chisinau.

Main goal is to achieve identified and described in the required infrastructure


financing. The overall objective and specific objectives of the project have in mind the
following:

The nature of the investment is of the PICO (Continuous Point Input Output).

In fact the project implementation and achievement of new infrastructure is equivalent


to 28 months, while the operational phase with impact and results concerning the
economic and social, Is estimated at 20 years, during which the investment will be
recovered.

It also should consider the fact that the project by its nature has to and acquisition of
equipment specific to Romania and Moldova which was not made until the date of this
application. It is envisaged that the equipment purchased their payback period is 7 years,
in accordance with legislation.
1.1. Analysis of alternatives
Are presented here for comparison to potential alternative 3:
i) any investment,
ii) the interim investment,
iii) full investment.
The criterion of evaluation of these alternatives is effective in achieving project
objectives rather than efficiency in terms of costs and benefits
. This is because the public nature of goals and activities receiving investment UASVM
addressed. Institutional objectives of this organization did not aim to maximize profits or
production value.
Consequently, production of goods connected to education and research are
important areas of relevant indicators to assess achievements UASVM.
Taking into account these observations, the first alternate (without investment) is the
inefficient, even if it is the cheapest, because the project does not enable even a very low
level of project objectives (0% efficiency).
This estimate is justified by the high degree of innovation introduced by the new
equipment and the difficulty of finding private companies able to offer services with
comparable quality standards.
Solution with an investment term, can be treated in 2 ways:
I) as an investment involving the acquisition of parts of equipment needed to
achieve full project scope
II) as an investment in stages, for which this project is a step.
Each of these 2 options is of low efficiency, even if the option is probably less
effective than II (depending on the specific case).
Given the interconnection between different laboratories and partial specific
infrastructure investment (I-option) has a low degree of inefficiency, if the rate of
completion will be close to 100% of the total investment amount (minimum 85% could be a
reasonable threshold critical). In while achieving a rate of more than 85% limited strong
critical threshold, below this percentage drops quickly and strong.
In investment efficiency while the degree of inefficiency II option (on stage
investment) depends on:
i) the number of planned steps,
ii) the date of execution of each phase,
iii) the percentage of investment made in each account stage.
Taking UASVM ability to invest and which depend heavily on public funds, the II -
option presents a high risk, if like the first option, not achieved a high percentage in
investment in the first phase (minimum 85%).
Also in this case, the degree of inefficiency can grow faster and much, given that we
consider the interconnections between devices in the analytical laboratory under the
project.
Not be ignored or that an investment intermediary as for can use and facilities in
which endowment are partly used for mining and require additional investment.
On these considerations, alternative III (complete investment) is the best solution
for ensuring a high rate of efficiency in relation to target objectives proposed in the project.
Practically the future equipment will include 3 parts treated unit volume of rennet,
which will form Software as a coherent whole so functional.
Such investment will focus on achieving: - reconstruction of buildings that will serve
composting center on a surface already existing of 300.55 square meters per floor, which
will be found in the attic and that the asset register at no UASVM Iasi. 11,010 named,
cage for birds and identified the layout at no. C13, with a total built surface of 601 mp.
Running a series of specific equipment and machinery which will include a public access
area - one platform composting, on an area of 700 mp, fitted with pool of urine and which
is found on plane the situation at no. C8
1.1. Financial and Economic Analysis
Considering those shown in the previous paragraph, the financial analysis is
conducted only for full investment alternative.
In this specific case it should be noted (default) - that values the cash flow
generated in the project, non-commercial products (development and dissemination of
scientific knowledge, creating innovative specialist skills, a network ştintifice and
technology, existing human resource recovery, adoption of sustainable environmental
practices, creation of new jobs and to a lesser extent the university entrepreneurship
development related to the capitalization of compost, as a measure to protect the
environment and reducing fertilizers and pesticides producertii chemical synthesis.
Of those presented in the paragraph above can be inferred that the idea of financing
a default ajutotuluimay have on environmental health and population as well.
Economic and financial analysis of the project are similar in form: both appreciate
the investment profit rate.
The concept of financial profit is not the same as economic profit.
Financial analysis of the project estimated yield from the project operating entity, whereas
economic analysis measures the effects of the project on the national economy.
For a project to be economically viable, it must be sustainable both in terms of
financial and economic efficiency .
If a project is not sustainable in terms of financial, economic benefits will be
achieved. Financial analysis and economicis the 2 sides of a coin and are complementary.
Both types of analysis are made in monetary terms. The main difference stems
from the definition of costs and benefits.
The financial analysis all costs incurred in the project and the results arising from it
are considered. This form of analysis is necessary to:
i) assess the degree to which a project will generate sufficient income to meet
obligationsits financial,
ii) assess the incentives for producers iii) ensure that demand and output
projections on which econ
The economic analysis aims to assess the impact of the project on improving the
economy and welfare of target groups or the local / regional respective.
Evaluating the project in the context of the economic system rather than participants
in the project or entity responsible for project implementation.Economic analysis differs
from financial analysis both in terms of:
(i) assessment of the size of inputs and outputs
(ii) measuring the benefitsand costs.
The economic analysis includes all members of society and measure the positive
and negative effects of the project in terms of acceptance of payment for the units they
consume and accept additional compensation for consumer units who quit, willingness to
pay and willingness to accept compensation are used in analysis rather than the price
actually paid or received, as many of the effects of the project to be included in economic
analysis can not be marketed as such: the conservation of biodiversity is incomplete or
marketable, like water supply or health benefits.omic analysis is available in the project.
However these values belonging to a non commercial, need to be estimated.
Hidden prices used in estimating willingness to pay and willingness to accept
compensation for such absences from the market or when market imperfections.
The benefits of a project is the extent to which project contributes to increased
consumption available value to society.
Consumption of the company can be explained as well the desire of companies to
pay for environmental conservation, and the willingness of society to consume natural food
and drink, to drink clean water.
The costs reflect the degree to which consumption in society is sacrificed by the
diversion of resources needed for a project by other users. Net change in available
consumption societies, representing the net effect of the project.
When consumer units are assessed in terms of readiness to pay for marginal units
of consumption growth and availability to be compensated for the marginal unit of
consumption forgone by the result of net economic benefits of the project will reflect the
net income of society as a whole, results of the project compared to the project did not
exist.
In many cases, many prices paid and received on account project may come from a
relatively settled market where major impacts are captured in transactions between buyer
and seller and are reflected in the price paid and received.
Structural adjustment, the adjustment measures and industry calling for a project
involving institutional and organizational approaches to market development to be
implemented successfully, the differences between financial values and economics values
can be reduced.
If this project is proposed by UASVM, the public nature of the objectives, activities
and results of production determined mainly by non-commercial property for private benefit
and public benefit is equal consequence is that economic and financial values tend to be
the same.
The following indicators were taken into account in the analysis: total flows of
benefits, total flows of costs, the benefit / cost, return on investment, net value added and
return on investment.
Financial analysis indicators show a satisfactory recovery rate investment.
The benefit / cost is positive (1.19) as a result of positive net present value (10.5
euro), the rate of payback (7.6 years) that can be considered reasonable compared with
similar investments in the private sector (4-5 years). Also IRR of 8.20% return on
investment and ensure good reliability over time.
Analysis of risk
In the project which wants to make a transfer center for recycling biodegradable
debris by composting, identified the following risks:
RISKS MEASURES
Overcome the risk of costs
If not observed any period or periods of Since the phase of organization
activities could result in budget overrun situation must be included in the budget as
down. Example, the actual situation is just current prices, taking additional
considered in the analysis of sensitivity, measures if the market changes
increased spending for investment
Corr
RISK lower input ect estimate and include in annual
As presented and sensitivity analysis, the budgets for amounts related to
Ministry of Research established an annual investment as well as all related
budget funding by category of expenditure, the costs (additional equipment,
budget is approved according to the existing furniture, new staff hired, etc.)
allocation and centrally.
Fol
RISK expenditure growth low and respect the amounts
Especially as business development and involved and approved by the
growing role that sports, there is added risk of Ministry of Research, and in the
additional expenditure categories, or even event of a new investment, it is
exceeded the approved budget of the Ministry well covered by increased
of Research. revenue Weight (advertising,
games event)

RISK technology The careful selection and rigorous


Is likely to project completion, the solution criteria based on the equipment
chosen to be exceeded due to technological chosen for the implementation of
obsolescence the new building.
RISK OF DELAY Establishing early design phase of
Reasons, more or less objective may not be aprons period or duration of
able to meet the deadlines set for activity.
implementation in various stages of building