NATIONAL ECONOMICS UNIVERSITY COST – BENEFIT ANALYSIS ESSAY Topic 1: A national standard swimming pool for NEU students Members: Phạm Hải Anh – 11180420 Vi Thị Mai Linh – 11182938 Trần Bảo Ánh – 11180615 Nguyễn Thị Thu Hằng – 11181529 Nguyễn Huyền Huy – 11182209 Nguyễn Duy Hùng – 11182021 Trần Thị Thu Ngân - 11183581 Nguyễn Thị Phúc Phương – 11184060 Class: Investment Economics AEP K60 Lecturer: PhD. Hoang Thu Ha ✦ HA NOI - 2021 ✦ 1 CONTENTS I. Alternative project 1: National 4 seasons swimming pool. Measure cost benefit with market price.
Cost and benefit measurement without market price:. Alternative project 2: Complex of swimming pools combined with restaurants to organize events. Measure cost & benefit with market price. Cost benefit measurement without market price.
Alternative project 3: O utdoor swimming pool project. Measure cost-benefit with market price. Cost-benefit measurement without a market price:. Alternative project 4: Swimming pool NEU.
Measure cost benefit with market price. Cost benefit measurement without market price:. Problem identification Building a complex of outdoor swimming pools combined with restaurants to organize events of National Economic University is important and helps to meet the needs of students for physical education more conveniently as well as increase revenue, improve the university's reputation, the financial expenses used for renting a swimming pool elsewhere are also reduced. The restaurant is the highlight combined with the swimming pools project is the perfect place to organize events for the university as well as guests who come to book a table can enjoy the beautiful scenery and delicious food here.
Alternative project 1: National 4 seasons swimming pool - Type: 4-season swimming pool, covered indoor pool. + The project includes 2 types of swimming pools. Basic tank: Stratify the depth from 1m2 to 1m8. Suitable for children as well.
Standard tank: maximum depth 1m8. Suitable for teaching and practicing for students including 10 swimming lanes with a wide width each lane is 2.5m - Services offered: + Clean water source, swimming pool is cleaned twice a day. + Sale and rental of life jackets, life jackets, swimming goggles. + Vending machines provide products such as water, snacks.
+ Support learning and physical training for students and lecturers in the school. + Sell tickets to guests who need to use the swimming pool. + Ticket selling terms: 3. Staff and students of National Economics University: 30,000 VND/time 3 4.
Outside customers: 45,000 VND/time + Partners: Stores that sell food, drinks, and home appliances that environmentally friendly, and suitable for a healthy lifestyle. (Go Eco Hanoi, Zero Waste Hanoi, Green Living, Clever Changes,.) + Customer care services: 5. Allow membership registration and monthly/yearly payment: members will receive discount vouchers for swimming on special occasions. Consulting + designing a nutritious diet / drink for members through text messages, emails.
Allows scanning QR codes to accumulate points every time you go to the swimming pool (5 points / time), exchange points for rewards,. Gifts for the customers: a. For customers who have accumulated 50 points or more: a discount voucher of VND 20,000 when shopping at stores: Go Eco Hanoi, Zero Waste Hanoi, Green Living, Clever Changes, The Bamboo. For members from 5 months or more: Send gratitude gifts on some special occasions.
Customer care and support service 24/24 via fanpage, hotline. - Location: the project is located on campus, near the EBBA Institute of Business Management. - Travel time: Save time, near the bus stop. 4 B/C TABLE 1 Primary benefits Primary cost With market price Non market price With market price Non market price - Revenue and profit - Bringing customers - Construction cost - Opportunity cost to for NEU from this closer to a green - Operation cost use land for other business project.
lifestyle and healthy - Maintenance cost purposes. - Cutting the rental diet by linking with -Equipment -Impacts on people costs. stores doing business purchase costs. nearby the in this area.
construction: air - The assurance of pollution, noise water quality, safety pollution and hygiene. - Create more jobs for the residents. - Save travel time for most of the NEU students and lecturers. - Promoting the spirit of sports, specifically swimming activities of students and people around the project area.
- Improve the reputation for NEU. Measure cost benefit with market price ❖ Market-priced benefits: - 1 year construction project (from 2021); The project is run into operation from 2022. 5 - The project attracts an average of 450 visitors/day; Average time using the service is 150 minutes (equivalent to 2.5 hours); - Expected ser vice price: Staff and students of National Economics University: 30,000 VND/time Outside customers: 45,000 VND/time - Reduce the cost of renting an outdoor swimming pool for the school annually by 300,000,000 VND/year. - Revenue from swimming pool service is 405,000,000 VND/month.
- Revenue from the project's beverage and fast food business: 10,800,000 VND/month - Revenue from swimwear rental service: 2,700,000 VND/month - Benefits from reducing the cost of using transportation to learn to swim in the pool outside for students & faculty 216,000,000 VND/year ❖ Cost with market price: Initial investment cost (it includes labor cost and is at full employment): ● Swimming pool construction cost: 1,300,000,000 VND ● Cost of facilities around the swimming pool: 200,000,000 VND Annual operating expenses: ● The project employs 50 employees; Monthly salary 6,000,000 VND/labor/month, including income tax. ● 10% of the workers are unemployed; The value of rest is 1,500,000 VND/worker/month ● The remaining number of employees being employed (not unemployed) is 90%; Salary is 6 000 000 VND/person/month. * Annual operating cost: 100,000,000 VND/month Company income tax rate: 20% 6 Table of annual revenue:(mil VND) Sector REVENUE Revenue from swimming pool (405+10.7+216)*12= 7 614 mil VND/year services Benefits from reducing school costs to 300 mil VND/year rent an outdoor swimming pool Benefits of reducing the cost of 216 mil VND/year commuting to the outside swimming pool for students & lecturers Revenue from the project's beverage 10.6 mil VND/year and fast food business Revenue from swimwear rental 2.4 mil VND/year service Table of initial investment costs (unit: million VND) Sectors INITIAL INVESTMENT COSTS Cost of building a swimming pool 1 300 Cost of building other utilities around the swimming pool 200 7 Table of annual costs (unit: million VND) Sectors ANNUAL COST Labor cost 50*6*12 = 3600 Cost of periodic repair 30*2 = 60 Annual operating cost 100*12 = 1 200 Table of social benefits and costs of the project on both private and social pointview Year Sectors Private pointview Social pointview (FA) (CBA) Benefit Year 1-25 Revenue from 7 614 0 swimming pool services Benefits from 0 300 reducing the cost of renting an outdoor swimming pool Benefits of reducing 0 216 the cost of commuting to the outdoor swimming pool for students/lecturers 8 Revenue from the 129.6 0 project's beverage and fast food business Revenue from 32.4 0 swimwear rental service Tax income (20 %) 0 2 916 x 20% = 583.2/year Cost Year 1 Swimming pool 1 300 1 300 construction cost Cost of building 200 200 utilities around the swimming pool Total 1 500 1 500 Year Labor cost 50*6*12 = 3600 12*50*(0.9*6+0,1* 2 - 25 1,5)=3330 Periodic repair costs 60 60 Maintenance Cost 100*12 = 1 200 1 200 9 Tax income 2 916 x 20% = 583.2/year 4590/year Net profit = Revenue – Labor cost – Maintenance cost – Operation cost = 7 776 - 3 600 - 60 - 1200 = 2 916 => net profit tax = 2 916 x 20% = 583.2 (mill VND/month) NPV - Investment cost Swimming pool construction cost: 1 300 mil VND Cost of facilities around the swimming pool: 200 => Total investment cost = 1 500 mil VND - Annual operating cost Labor cost: 3 600 mil VND/ year Cost of periodic repair: 60 mil VND/ year Annual operating cost: 1 200 mil VND/year => Total annual operating cost = 4 860 mil CND/ year - Benefit Revenue from swimming pool services : 7 614 mil VND/ year Benefits from reducing school costs to rent an outdoor swimming pool : 300 mil VND / year Benefits of reducing the cost of commuting to the outside swimming pool for students & faculty : 216 mil VND/year Revenue from the project's beverage and fast food business: 129.6 mil VND/ year Revenue from swimwear rental service: 32.4 mil VND/year => Total benefit = 8 292 mil VND/ year => Net benefit = 8 292 - 4 860 = 3 432 mil VND/year 10 (unit: million dong) Year Nominal net benefit CPI Real net benefit 0 100 1 3 432 102 3364,71 2 3 432 104,04 3298,73 3 3 432 106,12 3234,07 4 3 432 108,24 3170,73 5 3 432 110,41 3108,41 6 3 432 112,62 3047,42 7 3 432 114,87 2987,73 8 3 432 117,17 2929,08 9 3 432 119,51 2871,73 10 3 432 121,9 2815,42 11 3 432 124,34 2760,17 12 3 432 126,83 2705,98 13 3 432 129,36 2653,06 14 3 432 131,95 2600,99 15 3 432 134,59 2549,97 16 3 432 137,28 2500,00 17 3 432 140,02 2451,08 18 3 432 142,83 2402,86 11 19 3 432 143,965 2383,91 20 3 432 146,34 2345,22 21 3 432 148,715 2307,76 22 3 432 151,09 2271,49 23 3 432 153,465 2236,33 24 3 432 155,841 2202,25 25 3 432 158,216 2169,19 r = 4% => NPV = 43 452,88 mil VND B. Cost and benefit measurement without market price: Benefit Valuation methods Value of mil VND/using the school's swimming pool service Annual Once Health training for students Cost of avoidance (Evaluation 600 and lecturers at the school through saving on medical costs) 12 Create comfort and Cost of avoidance (saving the 750 initiative about the cost of renting an external arrangement of classes, swimming pool + the cost of class time of students and using transportation to study lecturers outside) Create peace of mind for Contingent valuation method 100 students and faculty about the quality of water in the pool Cost Method Valued by VND/time using the swimming pool’s service Annual One time Lost potential Opportunity cost of other 4900000 revenue projects III.
Alternative project 2: Complex of swimming pools combined with restaurants to organize events. Describe project - Investment capital is estimated at about 50 billion VND. - The outdoor swimming pool system of National Economic University includes a system of 2 swimming pools: the main swimming pool for learning, teaching, practice, 13 and competition activities for students and lecturers of the university, including 10 swimming lanes with a wide width. each lane is 2.5m; Secondary swimming pool with a smaller area serves the needs of entertainment, entertainment, and serves both adults and children.
The total area of the entire swimming pool area is 1800m2 and 800m2 around the area including the bathroom and changing areas; rental service business; warm-up area; and event restaurant area. The height of the tank wall is about 2m with a maximum water level of 1. The swimming pool has a modern trough system, reducing waves, reducing the best chemicals for the competition pool. Disinfection method is to use salt and chlorine.
The swimming pool project of National Economics University will provide the following main business services: a. Swimming service: to respond to the needs of swimming, relaxing swimming for customers. - Opening time: 5:30-20:00 every day of the week - Ticket price: + For students: the entrance fee is included in the tuition fee for Physical Education + For outside guests: 45000 VND/person - Utilities : + 10-lane swimming pool, width 2.
