Week 9 Assignment

timer Asked: Jul 25th, 2017

Question Description


Assignment 1: Application: Time-Value Formulas and Cost-Benefit Analysis

Governments are concerned primarily with real prices rather than "shadow prices," or prices that have been “assigned” to intangible costs and benefits. A major budget management function is cost-benefit analysis. When coupled with the use of time-value formulas, decision making related to operational expenditures is facilitated. Cost-benefit analysis is a means of evaluating all costs on a dollar basis, even those costs that do not have a dollar value attached to them. After all other calculations have been made, the analysis needs to conclude with the calculation of the ratio between costs and benefits. The results aid decision makers in considering multiple avenues for expenditure.

This week, you practice the principles and related formulas of time- (present) value and cost-benefit analysis, by completing problems related to two scenarios.

By Day 7

Submit a document containing the solutions and information necessary to satisfy the tasks outlined in the Week 9 Application Assignment Handout in this week's Learning Resources.

Note: The two scenarios are separate calculations and are not influenced by each other.

Support your Assignment with specific references to all resources used in its preparation. Be sure to follow APA guidelines when citing your sources.

Learning Resources

Required Readings

Mikesell, J. L. (2014). Fiscal administration: Analysis and applications for the public sector (9th ed.). Boston, MA: Wadsworth.
  • Chapter 7, "Capital Budgeting, Time Value of Money, and Cost-Benefit Analysis: Process, Structure, and Basic Tools" (pp. 299–337)

Friedman, M. (n.d.). The inflation calculator. Retrieved from http://www.westegg.com/inflation

Document: Week 9 Application Assignment Handout (PDF)

Required Media

Laureate Education (Producer). (2014). Net present value (NPV) [Video file]. Baltimore, MD: Author.

Note: The approximate length of this media piece is 5 minutes.

Preview of Week 9 & Information on the Week 9 assignment

Posted on: Monday, July 24, 2017 12:28:58 PM EDT

Hi Everyone,

Last week we covered various revenue sources so it's appropriate we considered expenditures in Week 9. This is another week where we don't have a discussion question. With your final project due in less than two week, you'll likely want to spend the additional time working on it.

If you have any questions about the Week 9 application, please post them in the Contact the Instructor forum as I will check into our classroom daily. For Week 9, you need to complete the two scenarios found in Assignment 1 area. While the assignment says it should be 3-4, the analysis is not that lengthy so you can likely cover all of the needed topics in 2 - 3 pages.

Here's some additional guidance for the application:

1. At the risk of sounding like your high school math teacher, please show your work - especially in regards to Scenario 2. If you just give me the cost-benefit ratio and it is wrong, then you won't earn any credit for this part of the application. However, if you show all of your work and your mistake is due to a minor calculation problem or figuring one of the costs incorrectly then you will earn a good deal of partial credit. You will want to show a cost or benefit for each of the items so I can track your work if the final answer is not correct.

2. Think about what costs are onetime - such a training - versus those that are ongoing - such as maintenance. You will treat them differently in your calculations.

3. In Scenario 2 you DO NOT need to apply a discount rate. Assume all dollars are current dollars when completing this part of the assignment.

4. Finally, the assignment isn’t an essay like most of the assignment. You will have a paragraph or two summarizing your findings in each scenario and the bulk of the assignment will be doing the calculations needed to complete the scenarios.

While there is no formal discussion this week, there is an optional blog area for you to discuss the case study (it is listed as Week 9 Assignment 2 – although it is not graded or required). You are welcomed to use this area to the challenges of doing this type of analysis and the implications cost-benefit analysis can have for public administrators. While I will check into the blog area throughout the week, please don’t post questions to me about the assignment there as I will not be checking the blog posts as frequently as the Contact the Instructor forum

Again if you have questions, please let me know. I hope you all had a good weekend! -Dr. Shafer

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