Final Report - Asian Development Bank

18
TA 4721-PRC: Preparing the Shaanxi-Qinling Mountains Integrated Ecosystem Management Project
Final Report Appendix 13
Cash in
0 2640 2640 2640 2640 2640 2640 2640
Revenue 0 2794 2794 2794 2794 2794 2794 2794
Sales Tax(5.5%)
Residual Value
0 154 154 154 154 154 154 154
Cash out 6766 1663 1644 1644 1644 1644 1787 1778
Investment 6478 0 0 0
Operating cost 288 1663 1644 1644 1644 1644 1787 1778
Net Cash Flow Before Income Tax -6766 977 996 996 996 996 853 861
FIRR Before Income Tax 13.67%
FNPV Before Income Tax at 10% 1916
Income Tax 0 157 162 162 162 162 126 128
Net Cash Flow After Income Tax -6766 820 834 834 834 834 727 734
FIRR After Income Tax 10.90%
FNPV After Income Tax at 10% 450
74. The FIRR is however quite sensitive to changes in costs or incomes suggesting that the
Project needs to be closely assessed in terms of the assumptions that are applied. Central to these
are (i) the construction period and the need to avoid delays, (ii) the occupancy early in the project life,
(iii) demand for the day visitation services.
Table 22: Hot Spring Financial Analysis Sensitivity
Sensitive Analysis
Before Income Tax After Income Tax
FIRR NPV FIRR NPV
Operating Cost (10% up) 10.89% 460 8.67% -649
Operating Cost (20% up) 8.03% -997 6.34% -1748
Operating Cost (30% up) 5.00% -2453 3.83% -2846
Revenue (10% down) 9.37% -317 7.44% -1225
Revenue (20% down) 4.68% -2551 3.57% -2900
Revenue (30% down) -1.06% -4784 -1.24% -4575
75. The Economic analysis is however somewhat stronger with a EIRR of 23.33 % suggesting a
very good investment. Economically the investment is relatively insensitive to changes in revenues
and costs – see Tables 23 and 24.
Cash in
Table 23: Economic Forecast for Hot Springs (CNY 0,000)
Item 2008 2009 2010 2011 2012 2013 2014 2015
Revenue 0 2794 2794 2794 2794 2794 2794 2794
Residual Value
Cash out 5587 1531 1512 1512 1512 1512 1655 1647
Investment 5299 0 0 0