The economic evaluation of investment in large-scale projects: an essay to recommend procedures

Abstract

The recommendations in this essay refer to the evaluation of large-scale projects - defined for our purposes as projects initiated above the level of the firm; from irrigation projects to reservoirs. The wide range of projects which possibly fit into this category means that detail is impossible in a paper of this nature. The essay considers primarily evaluation procedures in the New Zealand agricultural scene, and is limited to established discounted flow techniques. A working knowledge of these techniques is assumed. The following topics are dealt with: 1. Objective of the Investigation, 2. Scope of the Project, 3. Viewpoint, 4. Terminology, 5.Representation of Benefits & Costs, 6. Period of Analysis, 7. Discount Rate, 8. Index of Overseas Exchange, 9. Output Prices, 10. Sensitivity Analysis, 11. Double-counting, 12 Presentation of Results, 13. Expected Values, 14. Re-appraisal, 15. Investment & Financing, 16. Policy Conclusions.