FIAM USER GUIDE COVER II - Fiscal Impact Analysis Model - OKI

Fiscal Impact Analysis Model
User Guide
When you have entered or reviewed and accepted the data in the yellow and orange
cells, the Model will generate several items relating to the estimated costs:
• A statement of yearly costs associated with the capital item (not including the
down payment). This statement, in columns Q through Y, identifies the payment
per period and the total annual cost. These costs are provided in “Nominal” and
in “Real” dollars. The Nominal costs represent the value of money in the first
year of the payback period, and the Real costs discount the value of future
payments through the life of the loan on the basis of the economic assumption
that money to be accrued in the future has less value in the present than money
that exists in the present. This is, in many respects, the converse of inflation – it
is based on the assumption that, because of inflation, the same nominal amount
of money in the future will be actually worth less than the same amount at
present. Columns Q-T provide the actual cost over the payback period that was
identified in Column O, and Columns V-T estimate the cost if it were spread over
the actual expected life of the capital asset.
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