Need help with this cost and benefit problem. Please follow the instruction to solve the table question.(just draw the table in the excel first in the instruction, then write down the memo for one page). Thank you. If there is any further question, please contact me as soon as possible.

SPEA V401 - Financial and Cost-Benefit Analysis Spring 2016 Professor Bradley Heim Case Study #1 Due February 25, 2015 REMINDER: You are to work completely independently on this case study. If I receive evidence that a student helped, received help from, or worked together with another student, such student(s) will receive a 0 on this assignment and/or and F for the course. To raise some revenue to fund other operations, the City of Parkington is considering leasing off its parking spaces and meters to a private vendor. You are an analyst for ABS Parking, which is considering contracting with the city, and have been asked to analyze this potential investment. All project data, and appreciation rates, are in NOMINAL terms. The annual inflation rate is expected to be 1.6% over the lifecycle of this project. The city would lease the parking meter infrastructure to ABS parking for an initial fixed payment. ABS would be expected to make upgrades to the meters, collect meter revenue, enforce regulations and collect fines, and maintain meter operations within the city. After year 20, the parking meters would revert back to the city. The project would be structured one of the two following ways. First, the ABS could engage in a revenue sharing agreement with the city in which they will pay 25% of yearly meter revenue to the city as concession. Because of their willingness to share profits, the city will only require a $5 million initial payment for the lease of the parking in year 0. Second, ABS could keep all meter revenue. However, the city will view this as a cash flow risk and charge ABS parking an upfront cost of $7.5 million instead. Additionally, to compensate for the lack of annual cash flow from meters, the City will require ABS Parking to pay an availability payment of $50,000 per year starting in year 1, and this amount will increase annually by the inflation rate. Regardless of which option is chosen, ABS Parking will charge 25 cents per 10 minutes of parking. The expectation is that under this option, revenue will be $1 million in year 1, with an expected increase of 4% (but could be as high as 6% or as low as 2%) annually in years 2-20. ABS parking will also enforce parking regulations and collect parking ticket fees. It is estimated that $120,000 of fees will be assessed in year 1, and that figure will increase by 2% annually (but the increase could be as high as 3% or as low as 1%). The city and ABS parking will split the revenue from parking tickets 50/50. Under both options, in year 0, ABS Parking will have to upgrade the existing coin-operated parking meters to modernized parking boxes which will take credit/debit cards. The city will need 140 parking boxes, which cost $22,500 each. In addition, ABS will incur maintenance costs for the parking boxes starting at $275 per parking box per year in year 1, and increasing by 5% annually (but could be as high as 8% or as low as 2%). Finally, collecting revenue from the meters, enforcing regulations, and collecting fees, as well as other administrative requirements, will require ABS to hire additional labor, which will cost the firm $127,000 beginning in year 1, and increasing at 5.6% annually. Steve Olson, the Director of External Investments at ABS, wants to know if ABS should invest in this project, and if so, which type of payments they should make the city. The REAL hurdle rate is 5.5%. You are to do an analysis of the two options under the set of base assumptions, as well as a best case/worst case sensitivity analysis. You are then to write a memo outlining your findings and recommending an action. Writing Help: If you need help in the writing process, call Writing Tutorial Services (WTS) at 855-6738 for an appointment. WTS is located in the Information Commons in Wells Library, and is open M-Th 10A-8P and F 10A-5P. WTS tutors are also available in the Academic Support Centers in Briscoe, Teter, and Willkie residence halls, Sun-Th 7P - 11P. To be assured of an appointment with a tutor that is familiar with SPEA, call in advance. Outputs: A short (no longer than 1 page) memo which concludes with a recommendation of an option. This page limit is for text; add an extra page for tables. Your memo should include the following sections: Introduction and Background (One paragraph that describes project, analysis, and recommendation) Comparison of Lease Options (This should include discussion of Table 1.) Sensitivity Analysis (This should include discussion of Table 2.) Conclusion You should support the analysis in your memo using the information you calculate for the tables indicated in the Appendix of this case assignment (see below). Include these tables right after the memo text, labeled as Tables, not as appendices. Finally (though you would not do this in a normal work situation), include your Excel calculation tables for the Revenue Sharing base case and the Availability Payment base case. Make sure that all columns are clearly labeled. Print these using landscape page orientation so that each fits on one page. Appendix - Required Tables Table 1. Present Value of Parking Meter Options (2016 $) Revenu e Sharing Availability Payments Up-Front Costs Lease Payment Upgrades Operating Costs Revenue Share/Availability Payments Maintenance Labor Revenue Meter Fees Parking Tickets Net Table 2. Sensitivity Analysis - Net Present Values (2016 $) Revenue Share Base Assumptions Best Case Worst Case Availability Payments MEMORANDUM TO: V401 Students FROM: Professor Bradley Heim DATE: February 17, 2016 SUBJECT: Memo Writing in V401 This memo was drafted so that you can see what a memo in this class should look like. Below, I outline several important features to which you should pay attention. Memos that do not follow this format will be marked down accordingly. Format The font is Times New Roman, the font size is 11 point, and margins are set at 1 inch on each of the four sides. The document alignment is to the left, and paragraphs are not indented. Down through the SUBJECT line, spacing is set at 1.5 lines. After that, the document is single spaced, with a blank line separating section paragraphs and section headings. If your memo is longer than one page, be sure to paginate from page 2 on. Page numbers should appear in the bottom center of the page. Ensure that the length of your memo adheres to the length given in the assignment. When you hand your paper in, you must make sure your paper is stapled neatly in the upper left corner of the document. If the paper is not stapled, I will hand it back to you and consider it late. Organization Every memorandum should be titled MEMORANDUM, list who the memo is to and from, give the date of the memo (use the date that you are handing the memo in), and the subject of the memo. You should make sure that the subject accurately reflects the contents of the memo. Be straightforward - clever and cutesy subjects can be annoying to the reader and detract from the point of the memo. The memo should be divided into sections in a manner that helps the recipient find the information that they need. Ensure that the section titles provide useful information about the contents of each section. Conclusion Following the format in this document will help you to achieve better scores on the case studies. It will also provide you with experience in professional writing that will be valuable once you graduate from Indiana University and embark on your career. Memoranda Writing J. Patrick Dobel Richard F. Elmore Laurie Werner This note introduces memo writing to students training for careers in public service. It focuses on memos rather than research papers or essays because memos pervade the daily life of any public servant. A memorandum is a relatively short, written document. Memos address specific people or groups for the purpose of recording an agreement, transmitting information, making a case, or enabling action. Brevity is essential because most decision makers have little time and must assimilate the contents of your memo quickly. Long memos don't get read. Think of a memo as a precision tool. Tools may be beautiful things in themselves, but we measure their value by how well they perform a task. In practical terms, every aspect of a memoits prose - its prose style, organization, appearance on the page and contentshould have a direct, relationship to its purpose. Long flowery introductions, technical jargon, casual chit-chat, or showy vocabulary all distract from a memo's essential purpose: to inform or to enable action. This note deals with four topics: identifying your audience or principal; getting yourself engaged in writing, using language, and organizing the final product with a note on email communications. Know Your Audience or Principal Specific people read memos. Knowing the audience of your memo is of primary importance in memo writing. Ask yourself three questions when considering your audience: who are they, what do they need to know, and how should you present it to them. Who is the audience of your memo? Memos are directed at decision makers. Usually you write a memo for an individual or group to help them make a decision. To influence decision makers, you must give considerable thought to who they are. You have a duty to provide them with timely, accurate, and comprehensive analysis. What do they need to know? To meet the obligations of memo writing, you should ask: what type of information they need to make a good decision. Start writing your memo by considering the position of your reader and their responsibilities, constraints, and pressures. You should keep in mind how much knowledge they already have and judge your information based upon their level of expertise. Decide how much and what type of information they need to make a good decision. Four aspects should be kept in mind in considering this: 1. Your audience relies on you for accurate and relevant information. This reliance places strong obligations upon you to choose information well and present decision makers with all sides of the issues. Unless you are designated as an advocate or identify yourself as such, you must strive for an unbiased presentation of the information. Individuals are often tempted to push their own agenda without regard to the requirements of a good decision by the principal. This is legitimate when so identified in the memo. All memos however, should do justice to complex issues and to your principals. They are making the decision, not you. 2. Provide the bad news as well as the good. Your principals should be alerted to the dangers, problems and implications of decisions as well as the advantages. Although Memoranda Writing 2 memoranda drive people toward decisions, you may have the unhappy but vital duty of telling them they need more information to make a good decision. Often memos can only be summaries of arguments and reports, like the tip of an iceberg. The author should have supporting arguments and information to provide to the principals when needed or requested. 3. In recommending a course of action, clearly lie out the reasons, plus give honest and realistic alternatives. Anticipate questions, address them honestly and compare to other options. It is your job to anticipate needs and support the decision maker. How should you present the information to them? You should present any information with economy and clarity. Effectively writing a memo is a task that requires special emphasis on clear formatting and accessible writing. Be cognizant of the need to access information quickly with judicious use of headings and bullets. How to get engaged in serious writing Writing is difficult, frustrating work. Writing is a craft. It entails a set of specific, teachable skills, and results in a tangible product. The harder you work and the more determined you are to master the skills, the better you will become. Like any craft, it requires practice. When sitting down to write your memo, two steps will aid in the process of engaging you in writing: developing a system for writing, and remembering to get help when necessary. Because writing is difficult, you need an explicit system for getting started and finished. Most memo writing is done under pressure. Under these conditions people can get stalled, confused and side-tracked by psychological stress. Having a deliberate system gives you the self-discipline to plunge ahead in the face of this stress. In the absence of a system, you will find that you spend large amounts of time trying to figure out what you are doing. Some people start with an outline and produce progressively finer drafts until they have a finished product. Some people "dump" everything in their head on a given subject and then start culling and sorting until they produce a coherent piece. Others begin with a few simple statements or assertions and then frame an argument around them. Experiment with a variety of methods until you find one that suits your temperament. If you are having genuine difficulty and find that you don't know what to do, get help. Writing workshops are plentiful. Get together with a group of students for the express purpose of talking about writing problems. Get suggestions from your professors. Do not retreat from the problem. You will need to write well in every job you have. Using the Language Remember that your written work presents you to others. Your use of language will shape their assessment of you. Sloppy phrasing, bad grammar and incorrect spelling, for example, demonstrate unreflective thought. Respecting yourself, your ideas and your principal should motivate you to master this essential means of communication. Your writing should focus on five important aspects: simplicity, sentence structure, clarity, clear action and responsibility, and proofreading. Simplicity is the mark of good writing. Complex sentence structure and organization is a sure sign of confusion or hidden agendas. A well-written memo will be so simple and straightforward in language and structure that it will leap off the page. However, do not make the mistake of equating simplicity with ease of production. The harder you work, the simpler the prose gets: the more you shirk, the muddier it will be. Consider the following example: Memoranda Writing 3 Whether it is true or not, and there are strong indications that it is not, the allegation by the County of substandard performance against the contractor is premature and certainly serves no useful purpose. This person tried to write in a "conversational" tone. Conversational language tends to be more complicated, elliptical and indeterminate than good written prose. Written prose has to be edited to be good. Novice writers often respond to tough editing by complaining, "You've taken all the creative words out of my writing. Now it looks like something anybody could have written." In fact, tough editing does exactly the opposite. It makes your writing very distinctive. Remember, the message carries the mark of your individual creativity. Sentence structure is essential to clear communication. First, get the basic elements of the sentence straight: subject, verb, and object. Who is the major actor? To whom is the action directed? What action is being performed? What is the writer's purpose in describing the relationship between actors and actions? The county has accused the contractor of poor performance. This accusation is premature and possibly untrue. County, accuse, contractor - these are the elements. By stressing them, we cut the number of words roughly in half, from 37 to 16. We specified the nature of the action (accuse); we exchanged bureaucratic fuzz words (allegation, substandard) for simple ones (accuse, poor); and we allowed the writer to express some uncertainty about the conclusions (possibly). The reader captured the spirit of the writer's message much more effectively. These are the simplest writing techniques. Strip sentences to their elements and make those elements drive your sentences. Subject first, then verb, then object. Apply the techniques to this example: With respect to problems of interim financing, and in consideration of the fact that short-term interest rates are prohibitive, the decision was made by the Finance Committee that the project should not be pursued beyond stage three of the design process until appropriate long-term financing can be secured through established capital market sources.1 Clarity in word choice marks good writing. Clarity means three things: (a) choosing the right word; (b) preferring simple words or combinations to complex ones; and (c) avoiding technical jargon, except when essential. Choosing the right word is more difficult than it appears. When you begin writing something, certain stock phrases and terms roll out of your head onto the paper. These phrases and terms are cues to what you want to say, but often they do not convey what you actually mean. To communicate clearly, sort through alternative ways of saying what you mean. Get something on paper. Then, use your vocabulary, the dictionary, or a thesaurus, and deliberately substitute simpler words for complicated and ambiguous ones. Give special attention to verbs and active voice. Language in memos often becomes littered with complex phrases that have mushy meanings, because often people get caught in a cycle of bureaucratese. Take the following example: Current fiscal management techniques and control practices are keyed to the fiscal-year budgeting processes of the government cycle. They result in inefficient resource utilization because administrators increase expenditures toward the end of 1 The Finance Committee decided that interest rates for short-term loans were too high. Therefore, the project should not progress beyond stage three until lenders agree to long-term financing. (From 53 words to 28) Memoranda Writing 4 annual budget cycles in order to assure zero-balance results and reporting, rather than maximum efficiency in resource utilization. This example is littered with many quasi-technical terms: "fiscal management techniques," "resource utilization," and "budget cycles." These are common in bureaucracy but don't communicate much. In a more active direct form it reads: Administrators tend to spend more at the end of the fiscal year because they will lose the money they do not spend. Typically, they are not allowed to carry money forward into the following year. This results in expenditures that often are not the best use of public money. "Fiscal year" has been left in because it is a technical term that has important meaning. Beyond that, all the quasi-technical terms were removed and replaced with simpler words. Certain complex and mushy words creep into the language of public servants and become standard usage. Because bureaucrats use these words routinely, the public begins to think that bureaucrats are evasive. They are probably neither - just insufficiently critical of their own language. Here is a list of some standard bureaucratic words and their English equivalents. Bureaucratic facilitate indicate impact concept English help/assist say/show effect/affect idea Another recent trend has been turning nouns into verbs. The trend started in computer circles where people "interface" with each other and "multiport" data. Today public officials "outsource" contracts and "task" people to perform jobs. Such jargon separates public officials from citizens and creates a mystifying and unnecessary code to hide bureaucrats from accountability. Another common practice is turning nouns and verbs into adjectives and running them together as strange compound words. These words often sound very important, but mean almost nothing. The following words capture recent bureaucratese: Nouns into Adjectives program initiation programmatic decision making problem areas Verbs into Adjectives diagnostic review decisional alternative elimination criteria For each of these compounds, someone took a noun (program, definition, problem, etc.) or a verb (diagnose, circumvent, decide) and stuck it in front of a noun, giving it the function of an adjective. You can make adverbs the same way: programmatically initiated, diagnostically reviewed, etc. This clumping creates unwieldy, often unintelligible prose The skill required to avoid this kind of clumping is simple. First, learn the difference between nouns, verbs, adjectives, and adverbs. Second, do not use compounds when a simple construction will suffice. Look at a number of alternative ways of saying something and choose the simplest way, rather than jamming words together because they sound authoritative and bureaucratic. Principals need lucidity, not jargon. Technical jargon becomes a barrier to clear communication. When someone says, "The purpose of our new thrust is to facilitate a more credible interface between clients and service deliverers and to indicate to top management how they ought to prioritize agency functions according to standard management concepts," you know they are not writing for real human Memoranda Writing 5 beings. Fellow citizens will have a difficult time deciphering the jargon. Automatically translate the words into English for you and others. As trustees of the common good, public officials have a special obligation to write in language that acknowledges and includes all members of the community. A civic language should include the entire population. This requires that we avoid language which limits the citizenry to certain groups and implicitly excludes the rest of the population. On a more positive level it obligates us to search for language that respects and acknowledges all individuals. Inclusive language, however, does not mean we must resort to awful English. Only muddled good intentions create those bureaucratic monstrosities: s/he, or his/her. In this case, inclusive language involves using plural pronouns, using both pronouns connected by "or" (he or she) or alternating the pronouns by section or example. The English language is evolving in the attempt to develop a more inclusive public vocabulary. Public servants should take the lead in this effort without reducing the language to trendy or bureaucratic neologisms. Clearly assigning action and responsibility characterize skilled writing. Bureaucrats notoriously use language that obscures responsibility. Organizational life seems to add this tendency to make no one responsible. The typical methods for obscuring the responsibility are through the use of the passive voice or the imperial \"we\". The classic device to hide responsibility is the passive voice, where the subject drives the object. It diffuses your analysis and backs into major points. Remember that the strength of the English language resides in verbs. Use strong, active verbs. A good editor tries to eliminate as many copulatives (there... is, are, was, were) and weak verbs as possible. Verbs carry action and significance. Good verbs and active voice eliminate the need for mindless space fillers such as "in order to," "with respect to," or "in consideration of.\" Every public servant should understand the distinction between active and passive voice. In active construction, the verb clearly acts on a specific person or thing. For example: boy takes apple. In passive construction, no particular person or thing takes action - apple is taken. Consider the following real examples: It is recommended that specific operational details of the tools addressed in this report and any others to be used in implementation of amended policies be clearly stated. (The construction obscures the responsibility for specifying recommendations and details. Who specifies?) If it is decided that some therapeutic programs within existing institutions are required, the personnel needed to run those programs must be fully informed as to the nature of the programs and their roles in them. (This is a triumph in passive construction. Not only does it fail to say who decides, it also fails to say who informs.) Once you understand the difference between active and passive voice, you understand exactly what questions to ask about ambiguities in responsibility and action. Beware of the temptation to use passive construction to conceal action or responsibility. Another bureaucratic device for concealing responsibility is the imperial \"we\": We have always argued that rapid transit is the best long-run solution to urban transportation problems, given finite energy resources. In the short run, though, we are faced with the immediate problem of how to accommodate the city to the automobile. Memoranda Writing 6 Notice how the writer uses the first \"we\" to communicate what they think and then uses the second "we" to implicate you in a point of view. You are supposed to miss the distinction and find yourself seduced into agreement. If you understand the imperial we, however, you will ask yourself immediately who "we" is. Once you ask that question, the whole charade collapses. To clearly assign action and responsibility, specify who is supposed to be doing what; then structure the sentence to reflect that. Who or what (subject) did what (verb) to whom or what (object)? Be sure to proofread your work. Remember not to rely solely on spell check either. Many words can be spelled in more than one way, preventing the spell check software from finding the error. Common examples are \"principle\" and \"principal\