Benefit Cost Analysis & Risk Analysis
Benefit Cost Analysis & Risk Analysis PART I. 1. Identify costs per year Below are the results of the Jasper National Park‘s total costs over a seven-year period. Year (all figures in $1,000)
2005
2006
2007
2008
2009
2010
2011
Total Costs (nondiscounted)
25.25
335.69
217.58
167.08
166.88
216.98
117.08
The costs above are non-discounted amounts. Use a discount rate of 7 percent to calculate discounted costs to the base year of 2005. Year (figures in $000’s) Total Costs (discounted to 2005
2005
25.25
2006
312.19
2007
187.11
2008
131.99
2009
120.15
2010
151.88
2011
67.90
2. Calculated benefits per year.
Year (figures in $000’s) Total Costs (discounted to 2005
2005
2006
0
0
2007
192.2
2008
214.7
2009
606.7
2010
1164.2
2011
1701.1
The benefits above are in non-discounted amounts. Use a discount rate of 7 percent to calculate discounted benefits to the base year of 2005.
Year (figures in $000’s)
2005
2006
0
0
Total Costs (discounted to 2005
2007
165.29
2008
169.61
2009
2010
436.82
2011
814.94
986.63
3. The graph below is showing the total cost and benefits of Jasper National Park up to the year 2011.
Benefits and Costs of Jasper National Park 1200 1000
$ 000's
800 Total Cost 600 Total Benefits
400 200 0 2005
2006
2007
2008 Year
2009
2010
2011
** Note the crossover point to a positive cash flow 4. Calculated cumulative benefits and costs
Year (figures in $000’s)
2005
2006
2007
2008
2009
2010
2011
Total costs
25.25
312.19
202.35
155.38
155.20
201.79
108.88
337.44
539.79
695.17
850.37
0 178.75
199.67
564.23
Cumulative costs Total benefits
25.25 0
1052.16 1082.7
1161.04 1582.0
Cumulative benefits
0
0
178.75
378.42
942.65
2025.35
3607.35
5. Comparing cumulative benefits and costs for Jasper National Park.
4000
Cumulative Benefits and Costs for Jasper National Park
3500 3000 $ 000's
2500
Cummulative Cost
2000
Cummulative Benefits
1500 1000 500 0 2005
2006
2007
2008
2009
2010
2011
Year
** Note when the cumulative benefits begin to exceed the cumulative costs. 6. Calculated the cumulative benefit to cost ratio Used the results from step 4 to calculate the cumulative benefit to cost ratio for each year at Jasper National Park. Year (figures in $000’s)
2005
2006
2007
2008
2009
2010
2011
Total costs
25.25
312.19
202.35
155.38
155.20
201.79
108.88
337.44
539.79
695.17
850.37
0 178.75
199.67
564.23
178.75
378.42
942.65
Cumulative costs
25.25
Total benefits Cumulative benefits
0 0
0
1052.16 1082.7 2025.35
1161.04 1582.0 3607.35
Cumulative Cost to Benefit Ratio
0:1
0:1
0.33:1
0.54:1
1.10:1
1.92:1
3.1:1
PART II. From looking at the information above, one can see that approximately five years after GIS implementation at Jasper National Park there is a positive cash flow for the organization. Because of this positive cash flow the cumulative benefits of having the GIS also begin to surpass the cumulative costs during the year 2009. All of this shows that the after seven years of having a GIS the benefit to cost ration will be 3.1:1, allowing for Jasper National Park to make money but also be working more efficiently reducing their costs. Over all showing that the GIS implementation to Jasper National Park is a positive for the organization.
2005
2006
2007
2008
2009
2010
2011
Total Costs (nondiscounted)
25.25
335.69
217.58
167.08
166.88
216.98
117.08
The costs above are non-discounted amounts. Use a discount rate of 7 percent to calculate discounted costs to the base year of 2005. Year (figures in $000’s) Total Costs (discounted to 2005
2005
25.25
2006
312.19
2007
187.11
2008
131.99
2009
120.15
2010
151.88
2011
67.90
2. Calculated benefits per year.
Year (figures in $000’s) Total Costs (discounted to 2005
2005
2006
0
0
2007
192.2
2008
214.7
2009
606.7
2010
1164.2
2011
1701.1
The benefits above are in non-discounted amounts. Use a discount rate of 7 percent to calculate discounted benefits to the base year of 2005.
Year (figures in $000’s)
2005
2006
0
0
Total Costs (discounted to 2005
2007
165.29
2008
169.61
2009
2010
436.82
2011
814.94
986.63
3. The graph below is showing the total cost and benefits of Jasper National Park up to the year 2011.
Benefits and Costs of Jasper National Park 1200 1000
$ 000's
800 Total Cost 600 Total Benefits
400 200 0 2005
2006
2007
2008 Year
2009
2010
2011
** Note the crossover point to a positive cash flow 4. Calculated cumulative benefits and costs
Year (figures in $000’s)
2005
2006
2007
2008
2009
2010
2011
Total costs
25.25
312.19
202.35
155.38
155.20
201.79
108.88
337.44
539.79
695.17
850.37
0 178.75
199.67
564.23
Cumulative costs Total benefits
25.25 0
1052.16 1082.7
1161.04 1582.0
Cumulative benefits
0
0
178.75
378.42
942.65
2025.35
3607.35
5. Comparing cumulative benefits and costs for Jasper National Park.
4000
Cumulative Benefits and Costs for Jasper National Park
3500 3000 $ 000's
2500
Cummulative Cost
2000
Cummulative Benefits
1500 1000 500 0 2005
2006
2007
2008
2009
2010
2011
Year
** Note when the cumulative benefits begin to exceed the cumulative costs. 6. Calculated the cumulative benefit to cost ratio Used the results from step 4 to calculate the cumulative benefit to cost ratio for each year at Jasper National Park. Year (figures in $000’s)
2005
2006
2007
2008
2009
2010
2011
Total costs
25.25
312.19
202.35
155.38
155.20
201.79
108.88
337.44
539.79
695.17
850.37
0 178.75
199.67
564.23
178.75
378.42
942.65
Cumulative costs
25.25
Total benefits Cumulative benefits
0 0
0
1052.16 1082.7 2025.35
1161.04 1582.0 3607.35
Cumulative Cost to Benefit Ratio
0:1
0:1
0.33:1
0.54:1
1.10:1
1.92:1
3.1:1
PART II. From looking at the information above, one can see that approximately five years after GIS implementation at Jasper National Park there is a positive cash flow for the organization. Because of this positive cash flow the cumulative benefits of having the GIS also begin to surpass the cumulative costs during the year 2009. All of this shows that the after seven years of having a GIS the benefit to cost ration will be 3.1:1, allowing for Jasper National Park to make money but also be working more efficiently reducing their costs. Over all showing that the GIS implementation to Jasper National Park is a positive for the organization.
