impact assessment report series - Grains Research & Development ...

7.6 Results
All past costs and benefits were expressed in 2008/09 dollar terms using the CPI. All
benefits after 2008/09 were expressed in 2008/09 dollar terms. All costs and
benefits were discounted to 2008/09 using a discount rate of 5%. The base run used
the best estimates of each variable, notwithstanding a high level of uncertainty for
some estimates. All analyses ran for the length of the investment period plus 30
years from the last year of investment (2008/09) to the final year of benefits
assumed (2038/39). The costs are those for the projects in the Soil Biology Cluster.
(The post-project costs totalling $9 million have been subtracted from benefits.)
Investment criteria were estimated for both total investment and for the GRDC
investment alone. Each set of investment criteria were estimated for different
periods of benefits. The investment criteria were all positive (or other) as reported
in Tables15 and 16.
Table 15: Investment Criteria for Total Investment and Total Benefits for Each
Benefit Period -(discount rate 5%)
Criterion
Present value of
benefits (m$)
Present value of
costs (m$)
Net present value
(m$)
Benefit cost ratio
Internal rate of
return (%)
nc not calculable
Period of Benefit
( in Years from Last Investment in 2008/09)
0 5 10 20 25 30
-2.07 -1.39 16.82 59.27 72.87 83.52
20.62 20.62 20.62 20.62 20.62 20.62
-22.69 -22.01 -3.80 38.65 52.25 62.90
-0.10 -0.07 0.82 2.87 3.53 4.05
nc nc 3.5 11.4 12.1 12.4
Table 16: Investment Criteria for GRDC Investment and Benefits to GRDC for Each
Benefit Period - (discount rate 5%)
Criterion
Present value of
benefits (m$)
Present value of
costs (m$)
Net present value
(m$)
Benefit cost ratio
Internal rate of
return (%)
nc not calculable
Period of Benefit
(in Years from Last Investment in 2008/09)
0 5 10 20 25 30
-1.05 -0.70 8.55 30.12 37.03 42.44
10.48 10.48 10.48 10.48 10.48 10.48
-11.53 -11.18 -1.93 19.64 26.55 31.96
-0.10 -0.07 0.82 2.87 3.53 4.05
nc nc 3.5 11.4 12.1 12.4
_________________________________________________________________
Agtrans Research Page 30