Cost-Benefit Analysis of three selected FWPA Projects: On board computers, Formaldehyde testing of wood panels and Vineyard post treatment – April 2013
Three FWPA projects, On board computers (PNC119-0809), Formaldehyde testing of wood panels (PNB035-0506) and Vineyard post treatment (PNB049-0809), were selected at random to have a cost: benefit analysis applied. The investment criteria were Net Present Value (NPV), Benefit Cost Ratio (BCR) and the Internal Rate of Return (IRR).
The NPV of a project is calculated by subtracting the costs from project benefits through time. Where the NPV is positive, benefits are greater than costs and the investment can be considered economically attractive.
The BCRs and NPVs for the three projects were positive. On board computers generated a BCR of 8.84:1 and NPV of 8.22; Formaldehyde testing of wood panels generated a BCR of 1.78:11 and NPV of 0.05; and Vineyard post treatment generated a BCR of1.53:1. 1 and NPV of 0.33.