Economic Internal Rate Of Return Research Articles

우간다 동부 부탈레자 주 모자보건 증진 사업의 비용편익분석

Purpose: The purpose of this study is to conduct a cost-benefit analysis of a Uganda Butaleja Maternal Newborn and Child Health Project which has been implemented by a Korean NGO from 2015 to 2018. Originality: Economic evaluation has been acknowledged as a crucial method for gauging the effectiveness of international development cooperation projects in the health sector, but it is being carried out on a limited basis due to limitations in financial and human capabilities. It is significant that the economic evaluation was conducted to complement the limitations of existing cost-benefit analysis studies. In particular, it is meaningful in that it confirmed the economic feasibility of integrated maternal and child health projects that combine hardware and software, including capacity building, awareness improvement, and behavioral change. Methodology: This study employs cost-benefit analysis and evaluates the economics of the targeted project through (i) Net Present Value (NPV), (ii) Cost-Benefit Ratio (BCR), and (iii) Economic Internal Rate of Return (EIRR). Additionally, sensitivity analysis has been conducted to mitigate potential errors in the assessment process. Result: The cost-benefit analysis yields a NPV of $83,909,933, an EIRR of 71%, and a BCR of 21. The project is deemed cost-effective, as the net present value exceeds 0, the EIRR surpasses the social discount rate, and the BCR is greater than 1. Conclusion and Implication: The results of this study confirmed that integrated maternal and child health ODA projects that combine hardware and software are economically effective, even when long-term maintenance costs are included.

Estimates of Renewable Energy Recovery from Biogas in Residential Buildings: Economic Feasibility Analysis

Increasing of energy demand and climate change have hampered sustainable development. This article aimed to study the potential of biogas recovery for energy generation from compact wastewater treatment plants in buildings. Three buildings were selected and an economic feasibility analysis was carried out. The net present value (NPV) was positive and the economic internal rate of return (EIRR) was higher than the minimum attractive rate in five of six cases, showing that energy savings were sufficient to cover implementation, operation, and maintenance costs, with two to four years of payback time for biogas structures. The anaerobic reactor was responsible for the main expenditure, which indicates the importance of developing low-cost and compact units for decentralized wastewater treatment. Finally, the results indicate that biogas may be a promising and viable energy source in residential buildings.

Assessment of Socio-Economic Benefits from the Construction of Bypasses of Transport Infrastructure

The aim of the study is to analyse the feasibility of the second phase of the construction of the Rožaje (Montenegro) bypass project. The objectives of the construction of this bypass are to eliminate or reduce existing problems by redirecting transit flows to the bypass. Based on the observed economic costs of construction and the expected economic benefits from the project in a 20-year period, by applying Cost-Benefit Analysis (CBA), the indicators of the project economic feasibility were determined. As part of the socio-economic analysis of the project feasibility, the expected benefits for transport users (savings in travel time and savings in the vehicle exploitation costs), as well as external impacts (impacts on safety and impacts on the environment) were assessed. The analysis showed the dominant savings are in travel time and vehicle exploitation costs. The economic net present value (ENPV) of this project is positive and amounts to EUR 55 054 502, the economic internal rate of return (EIRR) is 26.88% (with a discount rate of 5%), while the benefit-cost ratio (B/CR) is 4.96. All scenarios developed within the Project Sensitivity Analysis have confirmed that this project has satisfactory economic justification.

Assessment of Socio-Economic Benefits from the Construction of Bypasses of Transport Infrastructure

The aim of the study is to analyse the feasibility of the second phase of the construction of the Rožaje (Montenegro) bypass project. The objectives of the construction of this bypass are to eliminate or reduce existing problems by redirecting transit flows to the bypass. Based on the observed economic costs of construction and the expected economic benefits from the project in a 20-year period, by applying Cost-Benefit Analysis (CBA), the indicators of the project economic feasibility were determined. As part of the socio-economic analysis of the project feasibility, the expected benefits for transport users (savings in travel time and savings in the vehicle exploitation costs), as well as external impacts (impacts on safety and impacts on the environment) were assessed. The analysis showed the dominant savings are in travel time and vehicle exploitation costs. The economic net present value (ENPV) of this project is positive and amounts to EUR 55 054 502, the economic internal rate of return (EIRR) is 26.88% (with a discount rate of 5%), while the benefit-cost ratio (B/CR) is 4.96. All scenarios developed within the Project Sensitivity Analysis have confirmed that this project has satisfactory economic justification.

Economic and financial aspects of drinking water supply: a project development guideline

Water is one of the most important elements of life, and there is no alternative for human beings. Faced with limited water and financial resources, public policymakers are trying to find new ways of providing society with an appropriate quality of water by attracting private investors. This paper attempts to answer the question of how water sector projects can be developed with private investments to deliver desired economic and social benefits to society. From this perspective, the paper sets the objective of designing a cost–benefit analysis framework that compares the possible deployment models and analyses the optimal solutions that achieve both optimal economic and financial outcomes and can be instrumental in decision making for water sector projects. As a result, the levels of the economic internal rate of return for public decision makers and financial internal rate of return for private investors are examined.

Analysis of financing schemes from land value in Transit Oriented Development at Bubulak Terminal

<p class="ListParagraph1">Oriented areas are often known as Transit Oriented Development (TOD) requiring financing, which is absolutely necessaryto accommodate developing activities and encouraging regional growth and land use plans in accordance with TOD regulations,Bubulak Terminal is one of the terminals in Bogor City because has a variety of economic activities be it bus companies (PO), public transport, trade and services. This study plans land use in accordance with PermenATR/KaBPN No. 16 of 2017 concerning TOD Development Guidelines and using a financing scheme for the Bubulak Terminal Area using analysis calculations with the Financial and Economic Calculation Methods, the results of these calculations that are in accordance with data from internet literature studies of scientific papers and books. The results of the analysis of the TOD area of Bubulak Terminal with a mix use designation of 1606 pcu/hour. The results of the calculation of the Financial Calculation value of NPV (Net Present Value) are RP 38.144.000.000,00 and the results of the IRR calculation for the Bubulak Terminal area show an IRR value of 14.92 %, so the project is feasible to run/choose with a capital cost (WACC) of 11.56%. While the calculation result of the Economic Net Present Value (ENPV), the calculation result is RP 325.848.272.000,00 and the result of the Economic internal rate of return (EIRR) is 31.19%, the project will benefit and is feasible to run with revenue in 2023 Stakeholders involved in the TOD area at Bubulak Terminal, namely BPTJ as the regulator as well as the Responsible Agency for Cooperation Projects (PJPK) in developing TOD in Jabodetabek.</p>

Financial and Socio-Economic Effects of Investment in the Context of Dog Population Management.

The modern world faces serious challenges associated with the presence of stray dogs on the streets, especially in urban areas. Vardar Planning Region in North Macedonia, which consists of nine municipalities, experiences such challenges. According to current reports, the number of stray dogs on the streets of cities in this region has increased, which has resulted in an increase in the number of dog attacks on residents. As the existing capacities are small in the registered shelters, we considered the possibility of building a new shelter for stray dogs to meet the needs of this region. The goal of our paper is the evaluation of the financial and socio-economic justifications for the construction of a shelter for stray dogs in the Vardar Planning Region (VPR). The results of the financial justification analysis show that the project does not provide satisfactory financial results. Namely, the Financial Net Present Value (FNPV) is negative, with a value of EUR 75,291. The Financial Internal Rate of Return (FIRR) is 0.57%, lower than the discount rate, which is not acceptable for a private investor. The Financial Benefit-Cost Ratio (FB/CR) of this project is 0.925, suggesting that the total discounted costs are greater than the total discounted revenues. On the other hand, the expected socio-economic benefits from this project are multifaceted, including savings in stray dog bite costs, savings in the cost of traffic accidents caused by stray dogs, and savings in the treatment of diseases caused by stray dogs. The results of the economic analysis show that this investment has full socio-economic justification and that it should be implemented. The Economic Net Present Value (ENPV) is positive and amounts to EUR 789,916. The Economic Internal Rate of Return (EIRR) is 25.94% and the Economic Benefit-Cost Ratio (EB/CR) amounts to 1.90, i.e., greater than 1. The results of the sensitivity analysis also confirm the justification for the realization of this project.

Analysis and Case Study of National Economic Evaluation of Expressway Dynamic Wireless Charging

As the transportation industry develops new forms of energy and electrification, expressway dynamic wireless charging has become an attractive technology that has the potential to completely solve a range of anxieties associated with electric vehicles. The main objective of this paper was to analyze the economic feasibility of dynamic wireless charging projects on highways. First, the roadside cost of dynamic wireless charging was estimated in terms of equipment, construction, and maintenance costs. Then, various indicators of the national economy of expressway dynamic wireless charging were analyzed. Finally, using the GM (1,1) model, a prediction model for evaluating the associated economic benefits is proposed in this study. As a case study, a national economic evaluation of retrofitting a dynamic wireless charging infrastructure on the Guiyang to Xinzhai Expressway was calculated with the following results: the economic internal rate of return (EIRR) is 11.27% to 29.11%, the economic net present value (ENPV) is 321.59 million RMB to 733.51 million RMB, the economic benefit to cost ratio (EBCR) is 1.02 to 1.32, and the payback period is 3.15 years to 6.35 years. All indicators are higher than the benchmark value for the national economic evaluation, and the sensitivity analysis results are also higher than the benchmark. The results of this paper show that the project is economically feasible and has certain economic benefits. From the perspective of economic benefits, it is necessary to provide more effective information for investors and decision-makers to build dynamic wireless charging highway projects.

Financial and Economic Investment Evaluation of Wastewater Treatment Plant

Improved Cost-Benefit Analysis (CBA) analysis requires a broader analytical framework, in order to perceive each project individually from the perspective of potentially measurable and significant effects on the environment and society as a whole. The main goal of our paper is to assess the financial and economic justification for variant V3 (as the most technically optimal) of the wastewater treatment plant (WWTP) construction project in Nov Dojran, North Macedonia, with the purpose of advancing municipal infrastructure and environmental benefits from improved water treatment. Based on the economic analysis conducted, we conclude that the investment in the WWTP project is justified, because the economic internal rate of return is higher than the opportunity cost of capital (EIRR = 16.38%), the economic net present value is higher than 0, and EBCR (benefit-cost ratio) is greater than 1 (EBCR = 2.11). The highest environmental benefit of 49.2% in total environmental benefits is associated with nitrogen, while phosphorus is the next pollutant in the structure of environmental benefits at 46.1%. The environmental benefits of removing biological oxygen demand (BOD) and chemical oxygen demand (COD) are significantly less important, despite the removal of significant amounts of these pollutants during treatment. The situation is similar with suspended particles.

Factors affecting technology selection, techno-economic and environmental sustainability assessment of a novel zero-waste system for food waste and wastewater management

To provide food waste energy recovery, sludge management and building wastewater recycling with the primary goal of achieving zero-waste discharge, a novel integrated single-stage anaerobic co-digestion and moving bed biofilm reaction membrane bioreactor system has been developed. The acceptability of the technology and the sustainability of the zero-waste system were assessed by a proposed stepwise evaluation approach that included the factors affecting its usage, technical performance, environmental sustainability and economic feasibility. Based on the three experimental cases of the system prototype, the anaerobic co-digestions of food waste and wastewater sludge (Cases 2 and 3) provided slightly higher methane generation rates than was achieved from the mono-digestion of food waste (Case 1). Average methane yields from the anaerobic co-digestion (Cases 2 and 3) were in the range of 0.352–0.353 L/g TVS. The ratios of VFA/Alk of all the experimental cases were lower than 0.25, indicating the stable anerobic co-digestion performances. The MBBR-MBR was able to achieve ammonia removal rate in the range of 0.34–0.77 g NH4/m2-day. The co-treatment of combined wastewater was able to provide good reclaimed water that was suitable for landscape use. Life cycle assessment results showed that the proposed zero-waste system could reduce the impacts of climate change, eutrophication, acidification, and fossil resource depletion compared to conventional waste treatment. The economic Internal Rate of Return, Net Present Value, and Benefit/Cost of the system were around 9%, 2222 USD, and 1.44, respectively. The challenges and opportunities from implementing the system were discussed.

Design Optimization for Harnessing Low-Head Hydropower Potential Towards Socioeconomic Uplift

Energy is the primary feature for the development and economic growth of a country like Pakistan. Power potential at present, available at canal falls and barrages in Pakistan is approximately 5895 MW which requires harnessing in order to meet growing energy demand. Based on the hydraulic and hydrologic parameters of the Marala Ravi link canal, optimizations of energy and power have been carried out. Two scenarios are prepared concerning upstream water levels, i.e., maintaining constant full supply level (FSL) throughout the year and using actual observed water levels. In this study, a new parameter of inverse incremental energy is used for discharge optimization. The optimization of discharge, installed capacity and average annual energy by applying constant FSL on upstream of power house are 420 m3/s, 10.6 MW and 36.60 GWh, respectively, for first scenario and those are 395 m3/s, 6.36 MW and 27.30 GWh, respectively, for second scenario. Economic internal rate of return (EIRR) for two horizontal Kaplan pit-type turbines is 18.83% for first case and 15.32% for second case, thus showing improvement with first scenario.

Application of Cost-Benefit Analysis to Evaluate the Efficiency of Cultural Heritage Preservation Projects in Historic Towns of Russia

The article is dedicated to the problems of justifying public investment in projects aimed at Russian cultural heritage preservation. The case study considered in the article is the project “Preservation and Development of Small Historic Towns and Settlements” (Project). The preparation of this Project involved evaluation of its economic net present value. The results of the evaluation were used to justify the feasibility of public funding of the Project. Performing an economic cost-benefit analysis required conducting surveys of different target groups of potential users of the Project’s results regarding their willingness to pay for the proposed improvements. The surveys were conducted using contingent valuation methods in two historic towns: Rostov and Chistopol. The article discusses the methodological aspects of evaluating the efficiency of public investment in Russia and other countries and presents the results of the conducted surveys and the performed calculations of the Project efficiency indicators. The calculations show that the Project is justified at the federal level from the society’s perspective, as it has a positive economic net present value and an economic internal rate of return that exceeds the social discount rate.

The feasibility construction of Alas-Pedesi bridge in Kuta Cane Southeast Aceh district based on the analysis of the transportation economic value

Kutacane is a city located in Southeast Aceh district, the majority of the community’s economic income comes from agricultural and plantation products, the production of corn and cocoa is distributed to the city center from several sub-districts located across the Alas river which is a river that separates some of these districts from the city center. Therefore, the Lawe Alas-Pedesi bridge was built, to facilitate the distribution of production results by reducing distance and travel time. The purpose of this study was to determine the effect of the Alas-Pedesi Lawe bridge, on the operational costs of vehicles, agricultural production, plantations based on producer surpluses, and calculate the economic viability of development including Benefit Cost Ratio (BCR), Net Present Value (NPV), Economic Internal Rate of Return (EIRR). The results of this study get a total time difference of IDR 68,583, - / vehicle, a total difference in vehicle operating costs (BOK) of IDR.4,441, / vehicle, the profit of farmers (corn) for 10 years can be as much as IDR200.567.937.375, - / planting season, the total difference for the benefit of farmers (cocoa) for 10 years can be as much as IDR 3.919.484.400 / planting season. The economic feasibility of the construction of the Lawe Alas-Pedesi bridge obtained in 2030 has met the eligibility standards for all discount rates. In the BCR obtained a 10% discount rate is 1.74, a 12% discount rate is 1.46 and at a 15% discount rate is 1.12, and at the Net Present Value 10% discount rate is obtained NPV IDR 23,422,534,229, - discount 12% rate is obtained NPV IDR. 13,491,749,019, and at a 15% discount rate is obtained NPV IDR. 3,243,265,869. While the value of EIRR obtained at a discount rate of 16, 33 %, this shows the bridge Lawe Alas-Pedesi feasible to build the bank lending rate at 16.33%.

Economic analysis of port development project (case study: Belawan Port Medan)

Belawan Port is one of the most important ports on the island of Sumatra. Port conditions are currently only able to load ships with a maximum draft of 8.9 m for normal water level conditions. This condition greatly limits the productivity especially for large ships. Therefore, the access channel deepening project is proposed to improved loading and unloading activities. This study was conducted to assess the benefits received from the project. The study was conducted with the parameters EIRR (Economic Internal Rate of Return), NPV (Net Present Value), and PI (Provitability Index). Furthermore, it also conducted a study to make the Port of Belawan port become sustainable. After analysis, the value of EIRR is 23.53% and NPV is 622,586,691 USD, and PI is 3.99. These results showed that the project has the proper parameters even when the sensitivity analysis I done with the benefit reduce to 70% and cost at fixed. But to get a sustainable port predicate still needed some adjustments, especially in terms of preserving the natural environment in which the parameter is still below the standard. Necessary measures such as the provision of a special budget for green port adjustment programs and policies and the provision of facilities to support the program.

An economic analysis of the proposed Dhaka\u2013Chittagong Expressway in Bangladesh with the viewpoint of GHG emission reduction

Frequent road intersections in Dhaka–Chittagong National Highway (NH1), the major transport corridor of Bangladesh, significantly reduce the level of service of the corridor and eventually leads to inefficient fuel economy and excessive greenhouse gas (GHG) emission. In spite of upgrading NH1 into a four-lane highway, major road intersections reduce vehicle speed and increase congestion time and eventually burn fuel. Fuel expenses during this lost time cover no distance but increase vehicular emission within the vicinity of road and contribute to roadside temperature. Besides, the transport sector’s energy demand in Bangladesh is supported mostly by imported fuel that drains out foreign currency and inhibits GDP growth. Against the backdrop, the Government of Bangladesh is proposing to construct a four-lane expressway. The paper attempts to estimate the fuel loss savings, GHG emission reduction and economic benefit of constructing Dhaka–Chittagong Expressway. As the construction of the expressway paved a way for an increment of traffic growth by 10%, the study infers that the average lost time because of 36 intersections for a projected annual average daily traffic of 27,334 vehicles/day (in 2022). In addition to that, the fuel loss savings for various vehicle classes affect economic growth and the ensuing idling emission of EFI and MFI engines contributes to transport sector pollution. The study intends to expedite the fact that Dhaka–Chittagong Expressway would not only replace road interventions that reduce travel time cost, expenditures regarding vehicle operating and accident but also contributes cardinally to economic emancipation of the country. The estimated Benefit–Cost Ratio (BCR) was 1.23, net present value was 762.34 Million USD) and Economic Internal Rate of return was 18.27% of the proposed project.

A screening methodology for building multiple energy retrofit measures package considering economic and risk aspects

In recent years, more and more existing building has an ever increasing requirement of retrofit, which has been developed from individual measure to combination package of multiple measures. It has become the challenging task for screening building multiple energy retrofit measures package (BMERMP). In this paper, a stepwise screening methodology for BMERMP is proposed considering economic and risk aspects, which integrates Life-Cycle Cost (LCC) and Monte Carlo (MC) analysis. First of all, this paper puts forward a calculation reference table for energy saving retrofit potential. In addition, this paper also uses unit energy saving incremental cost (UESIC) to screen technology and suggests economic internal rate of return（EIRR）as cost-benefit analysis index of BMERMP. Furthermore, the authors propose the concept of Value-at-Risk (VaR) as an effective measure to control the risk. The VaR for EIRR is determined by risk variation and can be obtained through MC simulation. Meanwhile, the study takes a commercial building for example, this building comprises 19 measures in initial BMERMP by energy diagnosis and the VaR of initial BMERMP is 97.6%, which has a high risk. According to the ranking of UESIC value, when 4 high cost technologies are reduced, the VaR can be reduced to 0.07%, then the economy of BMERMP is feasible and the risk is controllable. This paper provides a new perspective for the decision maker to select BMERMP.

Project feasibility analysis economic model for private investments in the renewable energy sector

PurposeThe purpose of this paper is to explore the financial and economic aspects of the renewable energy sector aiming to develop and present a project feasibility analysis model that allows the public sector to master plan socially beneficial infrastructure projects and to find financially viable options for private investments. This paper develops a general frame that can be harmonized to a certain project by applying relevant country specific schemes.Design/methodology/approachThe cost-benefit analysis (CBA) approach is used to develop relevant formulas aiming to compare the economic internal rate of return (EIRR) and financial internal rate of return (FIRR) of the possible investment options. The IRR method is used for the development of a platform that will allow comparing different project alternatives and choosing an optimal model for both public and private partners. A case study approach from Uzbekistan is used to highlight the implementation possibilities of the model based on a certain country example.FindingsThis paper develops a decision-making frame allowing the public sector to find organizational options that provide economically viable projects and at the same time attract private investors in the latter. The designed map of possible benefits, costs and revenue mechanisms allows practitioners to analyze the economic and financial viability of the existing combinations by using the developed model.Practical implicationsThe developed model will allow the public sector to use the needed data on different possible design models in the developed formulas in order to identify the EIRR and FIRR of each option. Nevertheless, the application of the model will be possible after considering country specific options needed for CBA. The private sector can use the model to identify the financially acceptable options for the investments.Originality/valueThe paper provides the decision makers with a sound tool to identify the possible combinations of the options to conduct a relevant project with private investments in the renewable energy sector and to choose the model that generates the highest social welfare.

Business models and the private provision of public infrastructure: leaving no stone unturned

The present paper introduces a new approach for the calculation of the economic internal rate of return for the projects in the road sector aiming to consider the link between the chosen business models/revenue mechanisms and the economic output. The novelty of the current approach is that the economic output of the road projects is considered based on both design options of the roads and the chosen organisational model for the private investments. The current approach makes a strong fundament for the decision makers to master plan an economically viable road projects developed under private investment models.

Business models and the private provision of public infrastructure: leaving no stone unturned

The present paper introduces a new approach for the calculation of the economic internal rate of return for the projects in the road sector aiming to consider the link between the chosen business models/revenue mechanisms and the economic output. The novelty of the current approach is that the economic output of the road projects is considered based on both design options of the roads and the chosen organisational model for the private investments. The current approach makes a strong fundament for the decision makers to master plan an economically viable road projects developed under private investment models.

On the development of socially beneficial infrastructure projects

PurposeThe purpose of this paper is to introduce a project development framework (PDF) aiming to find socially beneficial public infrastructure provision (PIP) projects in the transport sector. From this perspective, the current paper focuses on the framework of finding an optimized PIP organizational model based on which the projects will be both economically and financially viable and will meet the interests of all the stakeholders. From this perspective, the objective of the current paper is to find in the design phase of the projects, a PIP organizational model for the transport sector, that generates the socially required economic internal rate of return (hereinafter EIRR), thus providing the society with the added social values from the relevant infrastructure projects and, at the same time, ensuring relevant level of the financial internal rate of return (hereinafter FIRR) for the private companies interested in investing in relevant assets. This allows finding socially beneficial PIP organizational model according to the adopted PDF.Design/methodology/approachThe methodology aiming to develop the PDF focuses on analyzing both the economic and financial effectiveness of the PIP projects by exploring different combinations of available options for business, contractual, and financial models of relevant projects. Based on the example of the Republic of Armenia it is shown how the EIRR can be calculated for the PIP projects using the adopted PDF by taking into consideration the transport sector specifics of the country.FindingsThe main advantage of the designed framework is that it focuses on the calculation of the EIRR not only based on the different design options, but also explores the influence of the chosen procurement models on the economic output of the projects. The identification and the calculation of the positive and negative externalities (benefits and losses of the projects) in the economic values within the current PDF serve as the main instrument for the development of the PIP optimized socially beneficial/viable organizational models. The main privilege of the paper is that it considers the social aspect of the project together with the financing aspect without extruding any interests of the parties.Originality/valueThe uniqueness and the novelty of the adopted PDF is that it considers the efficiency of the PIP projects based on the analysis of not only the design options that influence the economic and financial output of the projects, but also compares the impact of the different combinations of the existing privatization, partnership, contractual, financial, and business models on the level of the EIRR and the FIRR. The socially beneficial infrastructure (economically viable) model generates economically and financially viable projects. Thus, the public partner is provided with the highest social value while the private partner is guaranteed a desired financial return.