Cost-Benefit Analysis for Investment Decisions: Chapter 3 (The Financial Appraisal of Projects)

Glenn Jenkins (), Chun-Yan Kuo and Arnold Harberger ()
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Chun-Yan Kuo: Queen's University, Canada

No 2011-03, Development Discussion Papers from JDI Executive Programs

Abstract: The financial analysis of a project helps determine the financial viability and sustainability of the project. Since the integrated project analysis begins with the financial analysis and then the economic analysis, the concepts and data ought to be organized in a consequential and consistent manner. The comparison of either financial or economic benefits with their corresponding costs requires that all relevant data should be organized into a project profile covering the duration of the project's life. While a project profile is given by cash flows in the financial appraisal, the project's profile in the economic appraisal provides a flow of net economic benefits generated by the investment. This chapter explains how cash flow profiles of a project are developed and constructed in a consistent fashion. It also discusses how investment project can be evaluated from different points of view.

Keywords: Economic Analysis; Financial Appraisal; Cash Flows; Inflation Impacts; Valuation of Existing Assets (search for similar items in EconPapers)
JEL-codes: H43 (search for similar items in EconPapers)
Pages: 65 pages
Date: 2011-08
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Citations: View citations in EconPapers (1)

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