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This week, you practice the principles and related formulas of time- (present) value and cost-benefit analysis.
Scenario 1: Present-Value Calculation
Using the present value time-value formulas to calculate the future cost of goods and services is one way to produce more realistic prices. In this Application, you practice using a time-value formula to determine future prices.
The following simple, present-value formula shows the effect of discounting on the cost of a public policy. In the formula, the discount rate will be set at:
(1 + r)time where:
1= a constant
r = a selected interest rate
time = a period of time, usually a year
The formula is:
Cost or Benefit/(1+r)time
The calculation occurs like this example of $1,000 over 2 years discounted at 10%:
$1000/(1+10%)2 = $1000/(1.1)2 = $1000/1.21 = $826.44
Consider the following scenario:
A city wants to open a recycling center aimed at reducing waste. The total benefits of the program are valued at $1,000,000. Three different discount rates are estimated at 5%, 6%, and 7%. The time period for receiving the benefits of the program is two years.
Scenario 1 tasks:
Calculate the present value at each interest rate.
Note and discuss what happens to the present value at each interest rate.
Scenario 2: Cost-Benefit Analysis
Note: Scenario 2 is a separate calculation. Scenario 2 is not influenced by the results of Scenario 1.
In doing the following exercise, please refer to the discussion in pages 319?333 of Chapter 7 from Mikesell?s Fiscal Administration on cost-benefit and cost-effectiveness analysis. Cost-benefit analysis is a technique that assumes all costs and benefits can have a dollar value attached to them. It is a tool and should not be used as the sole basis for decision making. The result of a calculation is a ratio between costs and benefits. After all other calculations have been made, the analysis needs to conclude with the calculation of the ratio between costs and benefits. If the ratio costs exceed benefits, the project advice is to not accept the project and to consider accepting the project if benefits exceed costs. Consider the following example from the fictitious Swobodaville?s efforts to build a Community Windmill Renewable Energy Project. The following has been agreed upon:
Land is already owned. The price of a new is windmill is $150,000. A minimum of 50 windmills are needed to achieve desired efficiency compared to the current coal-burning method.
Staff training costs over three years when considering direct costs, including loss of productive hours while in training, will be $55,000 for each of the 10 specialists to be hired.
The annual operating and maintenance costs of the machine in the three-year period will be $35,000 per windmill.
The cost of shutting down a portion of the coal plant to achieve the same energy production as the windmills is $1,000,000.
There will be a decrease in staff productivity compared to coal-burning operations. This was calculated based on the 10 specialized staff members? average hourly rate of $55 and the number of hours added over the three year-period, 450. Three current coal plant workers who will lose their jobs is three at a wage of $35 per hour.
As a widely supported community project with an investment in every aspect of the community?s well being, quality of life expected from reductions in pollution is considered in the cost calculation. The medical center that conducted an analysis has concluded that the value of increased life expectancy should be included as a benefit to the community. The quality of life of 5,000 residents is expected to be increased by an average of dollars over three years. The average benefit of a resident (including all men, women, and children) over a three-year period is estimated to be $1,500.
The three-year savings on other pollution damage to buildings and grounds, calculated by the Sierra Club, is $7,000,000.
Scenario 2 tasks:
Calculate the cost-benefit ratio.
Explain whether the ratio is positive or negative.
If positive, explain if you would replace a portion of the coal-burning operation or the whole operation? Why or why not?
Support your Assignment with specific references to all resources used in its preparation. Be sure to follow APA guidelines when citing your sources.
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Compelling correspondence is essential to the achievement all things considered but since of the changing idea of the present working environments, successful correspondence turns out to be more troublesome, and because of the numerous impediments that will permit beneficiaries to acknowledge the plan of the sender It is restricted. Misguided judgments.In spite of the fact that correspondence inside the association is rarely completely open, numerous straightforward arrangements can be executed to advance the effect of these hindrances.
Concerning specific contextual analysis, two significant correspondence standards, correspondence channel determination and commotion are self-evident. This course presents the standards of correspondence, the act of general correspondence, and different speculations to all the more likely comprehend the correspondence exchanges experienced in regular daily existence. The standards and practices that you learn in this course give the premise to additionally learning and correspondence.
This course starts with an outline of the correspondence cycle, the method of reasoning and hypothesis. In resulting modules of the course, we will look at explicit use of relational connections in close to home and expert life. These incorporate relational correspondence, bunch correspondence and dynamic, authoritative correspondence in the work environment or relational correspondence. Rule of Business Communication In request to make correspondence viable, it is important to follow a few rules and standards. Seven of them are fundamental and applicable, and these are clear, finished, brief, obliging, right, thought to be, concrete. These standards are frequently called 7C for business correspondence. The subtleties of these correspondence standards are examined underneath: Politeness Principle: When conveying, we should build up a cordial relationship with every individual who sends data to us.
To be inviting and polite is indistinguishable, and politeness requires an insightful and amicable activity against others. Axioms are notable that gracious “pay of graciousness is the main thing to win everything”. Correspondence staff ought to consistently remember this. The accompanying standards may assist with improving courtesy:Preliminary considering correspondence with family All glad families have the mystery of progress. This achievement originates from a strong establishment of closeness and closeness. Indeed, through private correspondence these cozy family connections become all the more intently. Correspondence is the foundation of different affiliations, building solid partners of obedient devotion, improving family way of life, and assisting with accomplishing satisfaction (Gosche, p. 1). In any case, so as to keep up an amicable relationship, a few families experienced tumultuous encounters. Correspondence in the family is an intricate and alluring marvel. Correspondence between families isn’t restricted to single messages between families or verbal correspondence.
It is a unique cycle that oversees force, closeness and limits, cohesiveness and flexibility of route frameworks, and makes pictures, topics, stories, ceremonies, rules, jobs, making implications, making a feeling of family life An intelligent cycle that makes a model. This model has passed ages. Notwithstanding the view as a family and family automatic framework, one of the greatest exploration establishments in between family correspondence centers around a family correspondence model. Family correspondence model (FCP) hypothesis clarifies why families impart in their own specific manner dependent on one another ‘s psychological direction. Early FCP research established in media research is keen on how families handle broad communications data. Family correspondence was perceived as an exceptional scholastic exploration field by the National Communications Association in 1989. Family correspondence researchers were at first impacted by family research, social brain science, and relational hypothesis, before long built up the hypothesis and began research in a family framework zeroed in on a significant job. Until 2001, the primary issue of the Family Communication Research Journal, Family Communication Magazine, was given. Family correspondence is more than the field of correspondence analysts in the family. Examination on family correspondence is normally done by individuals in brain science, humanism, and family research, to give some examples models. However, as the popular family correspondence researcher Leslie Baxter stated, it is the focal point of this intelligent semantic creation measure making the grant of family correspondence special. In the field of in-home correspondence, correspondence is normally not founded on autonomous messages from one sender to one beneficiary, yet dependent on the dynamic interdependency of data shared among families It is conceptualized. The focal point of this methodology is on the shared trait of semantic development inside family frameworks. As such, producing doesn’t happen in vacuum, however it happens in a wide scope of ages and social exchange.
Standards are rules end up being followed when performing work to agree to a given objective. Hierarchical achievement relies significantly upon compelling correspondence. So as to successfully impart, it is important to follow a few standards and rules. Coming up next are rules to guarantee powerful correspondence: clearness: lucidity of data is a significant guideline of correspondence. For beneficiaries to know the message plainly, the messages ought to be sorted out in a basic language. To guarantee that beneficiaries can without much of a stretch comprehend the importance of the message, the sender needs to impart unmistakably and unhesitatingly so the beneficiary can plainly and unquestionably comprehend the data.>
