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cost benefit analysis EXERCISE 2) Cost Benefit Analysis Compare the following projects to decide which is the best in terms of cost/benefit; Project 1 Project
cost benefit analysis EXERCISE 2) Cost Benefit Analysis Compare the following projects to decide which is the best in terms of cost/benefit; Project 1 Project 2 3 500 2 400 400 100 20 350 50 15 100 50 Project Parameters Project Duration (Years) Total units to be constructed Units for sale Units for rent Rental period of units (years) Units for sale after rental period Construction cost for each unit Sales office cost Sales personnel cost per year Financing cost per year Sale price of each unit Sale price of each unit after rental period Rental price of each unit per year 100000 90000 2000000 300000 3000000 250000 3000000 120000 70000 2500000 135000 80000 4000 4500 Cost Calculations Project 1 Project 2 Project Costs Construction cost Sales office cost Sales personnel cost Financing cost TOTAL Benefit Calculations Project 1 Project 2 Project Benefits Income from sales Income from sales after rental period Income from rentals TOTAL Costs and Benefits Comparison Comparison Project 1 Project 2 Benefits Cost Profit
cost benefit analysis
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