Guide to COST-BENEFIT ANALYSIS of investment projects - Ramiri

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16 17 18 19 20 21 22 23 24 25 26 27 28 29 30PRIVATE EQUITY 0 0 0 36,192 0 0 0 0 0 0 0 0 0 0 0TOTAL NATIONAL PUBLICCONTRIBUTION0 0 0 0 0 0 0 0 0 0 0 0 0 0 0EU GRANT 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0LOANS 0 0 0 36,192 0 0 0 0 0 0 0 0 0 0 0TOTAL FINANCIAL RESOURCES 0 0 0 72,384 0 0 0 0 0 0 0 0 0 0 0Municipal waste 4,105 4,166 4,228 4,291 4,355 4,420 4,486 4,553 4,621 4,690 4,759 4,830 4,902 4,975 5,049Other waste 308 313 317 322 327 332 336 342 347 352 357 362 368 373 379Electricity 10,126 10,390 10,662 10,940 11,226 11,519 11,820 12,129 12,446 12,771 13,104 13,447 13,798 14,158 14,528Heat 5,879 6,038 6,202 6,371 6,544 6,721 6,904 7,091 7,283 7,481 7,684 7,893 8,107 8,327 8,553SALES 20,418 20,907 21,409 21,924 22,451 22,992 23,546 24,114 24,696 25,293 25,905 26,532 27,175 27,833 28,509TOTAL INFLOWS 20,418 20,907 21,409 94,308 22,451 22,992 23,546 24,114 24,696 25,293 25,905 26,532 27,175 27,833 28,509Labour cost 2,496 2,559 2,622 2,687 2,754 2,823 2,893 2,965 3,039 3,115 3,192 3,272 3,354 3,436 3,523Gas 303 312 322 332 342 353 364 375 387 399 411 424 438 451 465Eectrical energy 680 700 720 741 763 785 808 831 856 881 906 933 960 988 1,017Water services 9 9 9 10 10 10 10 11 11 11 11 12 12 12 13Raw material 357 364 371 379 386 394 402 410 418 427 435 444 453 462 471Intermediate services and goods 1,783 1,819 1,855 1,892 1,930 1,969 2,008 2,048 2,089 2,131 2,174 2,217 2,262 2,307 2,353Elimination of ash and slag waste 3,702 3,777 3,852 3,929 4,008 4,088 4,170 4,253 4,338 4,425 4,513 4,604 4,696 4,790 4,885TOTAL OPERATING COSTS 9,330 9,539 9,752 9,970 10,193 10,421 10,655 10,894 11,138 11,388 11,644 11,905 12,173 12,446 12,727Feasibility study, tender costs etc. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Land expropriation 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Buildings 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Equipments 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Investments costs 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Replacement costs 0 0 0 72,383 0 0 0 0 0 0 0 0 0 0 0Remediation and decontamination costs 0 0 0 0 0 0 0 0 0 0 0 0 0 0 32,967Residual valueOther investment items 0 0 0 72,383 0 0 0 0 0 0 0 0 0 0 32,967TOTAL INVESTMENT COSTS 0 0 0 72,383 0 0 0 0 0 0 0 0 0 0 32,967Bonds and other financial resources 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0EIB loans 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Other loans 0 0 0 0 1,810 1,629 1,448 1,267 1,086 905 724 543 362 181INTEREST 0 0 0 0 1,810 1,629 1,448 1,267 1,086 905 724 543 362 181 0Bonds and other financial resources 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0EIB loans 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Other loans 0 0 0 0 3,619 3,619 3,619 3,619 3,619 3,619 3,619 3,619 3,619 3,619 0LOANS REIMBOURSEMENT 0 0 0 0 3,619 3,619 3,619 3,619 3,619 3,619 3,619 3,619 3,619 3,619 0PROFIT TAXATION 2,042 2,091 2,141 2,192 2,245 2,299 2,355 2,411 2,470 2,529 2,590 2,653 2,717 2,783 0TOTAL OUTFLOWS 11,372 11,629 11,893 84,545 17,867 17,968 18,076 18,191 18,313 18,441 18,577 18,720 18,871 19,029 45,694NET CASH FLOW 9,046 9,278 9,517 9,762 4,584 5,023 5,470 5,923 6,383 6,852 7,328 7,811 8,303 8,804 -17,185CUMULATED TOTAL CASH FLOW 50,914 60,192 69,709 79,471 84,055 89,079 94,548 100,471 106,854 113,706 121,034 128,845 137,148 145,952 128,767166
Table 4.38 Economic analysis (thousands of Euros)CF 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15Municipal waste 0.96 0 0 0 1,643 3,335 3,385 3,435 3,486 3,538 3,591 3,644 3,699 3,754 3,810 3,866Other waste 0.96 0 0 0 123 250 254 258 262 265 269 273 277 282 286 290Electricity 0.96 0 0 0 3,552 7,289 7,479 7,675 7,875 8,081 8,292 8,508 8,731 8,959 9,193 9,433Heat 0.96 0 0 0 2,038 4,186 4,299 4,416 4,536 4,659 4,785 4,915 5,049 5,186 5,327 5,471SALES 0 0 0 7,355 15,059 15,417 15,783 16,159 16,543 16,937 17,341 17,755 18,179 18,614 19,060CO2 avoided (electricity) - 0 0 0 5,829 11,891 12,129 12,371 12,619 12,871 13,129 13,391 13,659 13,932 14,211 14,495CO2 avoided (heat) - 0 0 0 5 11 11 12 12 12 12 12 13 13 13 14POSITVE EXTERNALITIES 0 0 0 5,834 11,902 12,140 12,383 12,631 12,883 13,141 13,404 13,672 13,945 14,224 14,509ECONOMIC BENEFITS 0 0 0 13,190 26,961 27,557 28,166 28,789 29,426 30,078 30,745 31,427 32,124 32,838 33,569Skilled labour cost 1.00 0 0 0 481 494 507 521 535 550 565 580 596 612 629 646Non skilled labour cost 0.60 0 0 0 827 847 867 888 909 931 954 977 1,000 1,024 1,049 1,074Gas 0.96 0 0 0 100 206 213 219 226 233 241 248 256 264 272 280Eectrical energy 0.96 0 0 0 230 474 487 502 516 531 547 563 579 596 613 631Water services 0.96 0 0 0 3 7 7 7 7 7 7 8 8 8 8 8Raw material 0.96 0 0 0 135 274 280 286 291 297 303 309 315 322 328 335Intermediate services and goods 0.72 0 0 0 505 1,029 1,050 1,071 1,092 1,114 1,136 1,159 1,182 1,206 1,230 1,255Elimination of ash and slag waste 0.67 0 0 0 983 2,005 2,045 2,086 2,128 2,170 2,214 2,258 2,303 2,349 2,396 2,444TOTAL OPERATING COSTS 0 0 0 3,263 5,335 5,456 5,579 5,705 5,834 5,966 6,101 6,239 6,380 6,525 6,673Feasibility study, tender costs etc. 1.00 6,980 0 1,816 0 0 0 0 0 0 0 0 0 0 0 0Land expropriation 1.33 1,980 1,010 0 0 0 0 0 0 0 0 0 0 0 0 0Buildings 0.70 0 40,140 12,461 0 0 0 0 0 0 0 0 0 0 0 0Equipments 0.60 0 24,813 37,964 0 0 0 0 0 0 0 0 0 0 0 0Investments costs 8,960 65,962 52,240 0 0 0 0 0 0 0 0 0 0 0 0Replacement costs 0.67 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Remediation and decontamination costs 0.68 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Residual value 0.71 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Other investment items 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0TOTAL INVESTMENT COSTS 8,960 65,962 52,240 0 0 0 0 0 0 0 0 0 0 0 0Noise, odours, etc. - 0 0 0 184 375 383 391 398 406 415 423 431 440 449 458NEGATIVE EXTERNALITIES 0 0 0 184 375 383 391 398 406 415 423 431 440 449 458TOTAL ECONOMIC COSTS 8,960 65,962 52,240 3,447 5,711 5,839 5,970 6,104 6,240 6,380 6,524 6,670 6,820 6,974 7,130NET ECONOMIC BENEFIT -8,960 -65,962 -52,240 9,743 21,251 21,718 22,196 22,686 23,186 23,698 24,221 24,757 25,304 25,865 26,438CF 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30Municipal waste 0.96 3,924 3,982 4,042 4,102 4,163 4,225 4,288 4,352 4,417 4,483 4,549 4,617 4,686 4,756 4,827Other waste 0.96 294 299 303 308 312 317 322 326 331 336 341 346 351 357 362Electricity 0.96 9,679 9,932 10,191 10,458 10,731 11,011 11,299 11,594 11,897 12,207 12,526 12,853 13,189 13,534 13,887Heat 0.96 5,620 5,772 5,929 6,090 6,255 6,425 6,599 6,778 6,962 7,151 7,345 7,544 7,749 7,960 8,176SALES 19,517 19,985 20,465 20,957 21,461 21,978 22,507 23,050 23,607 24,177 24,762 25,361 25,976 26,606 27,251CO2 avoided (electricity) - 14,785 15,081 15,382 15,690 16,004 16,324 16,650 16,983 17,323 17,669 18,023 18,383 18,751 19,126 19,508CO2 avoided (heat) - 14 14 14 15 15 15 16 16 16 16 17 17 17 18 18POSITVE EXTERNALITIES 14,799 15,095 15,397 15,705 16,019 16,339 16,666 16,999 17,339 17,686 18,039 18,400 18,768 19,144 19,527ECONOMIC BENEFITS 34,315 35,080 35,861 36,661 37,479 38,316 39,173 40,049 40,946 41,863 42,801 43,761 44,744 45,749 46,778Skilled labour cost 1.00 663 681 700 719 738 758 779 800 822 844 867 890 914 939 965Non skilled labour cost 0.60 1,100 1,126 1,154 1,181 1,210 1,239 1,269 1,299 1,331 1,363 1,395 1,429 1,464 1,499 1,535Gas 0.96 289 298 308 317 327 337 348 359 370 381 393 406 418 431 445Eectrical energy 0.96 650 669 688 708 729 750 772 795 818 842 866 892 918 944 972Water services 0.96 9 9 9 9 9 10 10 10 10 11 11 11 12 12 12Raw material 0.96 341 348 355 362 369 377 384 392 400 408 416 424 433 441 450Intermediate services and goods 0.72 1,280 1,305 1,331 1,358 1,385 1,413 1,441 1,470 1,499 1,529 1,560 1,591 1,623 1,655 1,689Elimination of ash and slag waste 0.67 2,493 2,543 2,594 2,646 2,699 2,753 2,808 2,864 2,921 2,980 3,039 3,100 3,162 3,225 3,290TOTAL OPERATING COSTS 6,824 6,979 7,138 7,300 7,466 7,636 7,810 7,988 8,170 8,357 8,547 8,743 8,943 9,147 9,357Feasibility study, tender costs etc. 1.00 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Land expropriation 1.33 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Buildings 0.70 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Equipments 0.60 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Investments costs 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Replacement costs 0.67 0 0 0 48,497 0 0 0 0 0 0 0 0 0 0 0Remediation and decontamination costs 0.68 0 0 0 0 0 0 0 0 0 0 0 0 0 0 22,295Residual value 0.71 0 0 0 0 0 0 0 0 0 0 0 0 0 0 -6,393Other investment items 0 0 0 48,497 0 0 0 0 0 0 0 0 0 0 15,903TOTAL INVESTMENT COSTS 0 0 0 48,497 0 0 0 0 0 0 0 0 0 0 15,903Local impact - 467 476 486 495 505 515 526 536 547 558 569 580 592 604 616NEGATIVE EXTERNALITIES 467 476 486 495 505 515 526 536 547 558 569 580 592 604 616TOTAL ECONOMIC COSTS 7,291 7,455 7,624 56,292 7,971 8,152 8,336 8,524 8,717 8,915 9,116 9,323 9,535 9,751 25,875NET ECONOMIC BENEFIT 27,024 27,624 28,238 -19,631 29,508 30,165 30,837 31,525 32,229 32,948 33,685 34,438 35,209 35,998 20,902Discount Rate 3.5%ENPV 259,891.1ERR 15.1%B/C 2.0167
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ACRONYMS AND ABBREVIATIONSBAUB/CCBA
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TABLESTable 2.1 Financial analysis
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FIGURESFigure 1.1 Project cost spre
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Cohesion Fund, and through the leve
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or the plant will not reveal excess
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CHAPTER ONEPROJECT APPRAISAL IN THE
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Some specifications for financial t
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FOCUS: INFORMATION REQUIREDGeneral
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In particular, CBA results should p
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CHAPTER TWOAN AGENDA FOR THE PROJEC
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objectives, are, as far as possible
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considered the appropriate shadow p
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2.3.2 Feasibility analysisFeasibili
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This approach will be presented in
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Current assets include:- receivable
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The following items are usually not
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Mainly, the examiner uses the FRR(C
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The dynamics of the incoming flows
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eturn on their own capital (Kp). Th
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While the approach presented in thi
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2.5.1 Conversion of market to accou
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Table 2.9 Electricity price dispers
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2.5.1.2 Fiscal correctionsSome item
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previously estimated in projects wi
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FOCUS: ENPV VS. FNPVThe difference
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2.6 Risk assessmentProject appraisa
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Table 2.14 Impact analysis of criti
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Figure 2.6 Probability distribution
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eneficiary. The project proposer sh
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There are many ways to design an MC
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PROJECT APPRAISAL CHECK-LISTCONTEXT
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- reduction of congestion by elimin
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- the methods applied to estimate e
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- the marginal external costs: cong
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- the benefits for the existing tra
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The following tables show some refe
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3.1.1.6 Risk assessmentDue to their
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As shown in Figure 3.1, only under
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3.1.3.7 Other project evaluation ap
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- Waste Management Hierarchy rules
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The time horizon for a project anal
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every user support the total costs
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Territorial reference frameworkIf t
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Cycle and phases of the projectGrea
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One of the most important aims of t
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projects, as in other sectors in wh
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3.2.3.2 Project identificationBasic
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In order to evaluate the overall im
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for regassification plants, number
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Examples of objectives are:- change
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decontamination if any;- the techni
Page 115 and 116: 3.3.3.6 Risk AnalysisCritical facto
Page 117 and 118: 3.3.4.6 Risk assessmentCritical fac
Page 119 and 120: 3.4.1.5 Economic analysisThe follow
Page 121 and 122: Financial inflows• Admission fees
Page 123 and 124: expectancy suitably adjusted by the
Page 125 and 126: The time horizon for project analys
Page 127 and 128: A Cost-Benefit Analysis should cons
Page 129 and 130: CHAPTER FOURCASE STUDIESOverviewThi
Page 131 and 132: - finally, there is the traffic tha
Page 134 and 135: c) Road users producer’s surplus:
Page 136 and 137: 4.1.5 Scenario analysisTwo scenario
Page 138 and 139: The financial performance indicator
Page 140 and 141: Table 4.10 Economic analysis (Milli
Page 142 and 143: Table 4.12 Financial return on capi
Page 144 and 145: 4.2 Case Study: investment in a rai
Page 146 and 147: 4.2.4 Economic analysisThe benefits
Page 148 and 149: Financial investment costs have bee
Page 150 and 151: Figure 4.6 Results of the risk anal
Page 152 and 153: Table 4.22 Economic analysis (Milli
Page 156 and 157: 4.3 Case Study: investment in an in
Page 158 and 159: ate of 0.6% per year is assumed for
Page 160 and 161: The shadow price of the CO 2 avoide
Page 162 and 163: As a result, the probability distri
Page 168 and 169: 4.4 Case Study: investment in a was
Page 170 and 171: 4.4.2 Financial analysisAlthough in
Page 172 and 173: THE CALCULATION OF REVENUESReferrin
Page 174 and 175: 0.15 m 3 /m 2 a depreciation of 20%
Page 176 and 177: As result, the probability distribu
Page 178 and 179: Figure 4.13 Probability distributio
Page 180 and 181: Table 4.48 Financial return on nati
Page 182 and 183: Table 4.50 Financial return on priv
Page 184 and 185: 16 17 18 19 20 21 22 23 24 25 26 27
Page 186 and 187: 4.5 Case Study: industrial investme
Page 188 and 189: 4.5.4.1 Investment costsThe total i
Page 190 and 191: Finally, a residual value was estim
Page 192 and 193: This analysis shows the need to pay
Page 194 and 195: Table 4.62 Financial return on inve
Page 196 and 197: Table 4.64 Return on private equity
Page 198 and 199: Table 4.66 Economic analysis (thous
Page 200 and 201: ANNEX ADEMAND ANALYSISDemand foreca
Page 202 and 203: The method applied for the forecast
Page 204 and 205: Furthermore, travel demand depends
Page 206 and 207: This Guide supports a unique refere
Page 208 and 209: A higher discount rate for countrie
Page 210 and 211: Figure C.1 Project ranking by NPV v
Page 212 and 213: The main problems with this indicat
Page 214 and 215: EXAMPLE OF SHADOW WAGE IN DUAL MARK
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Another exhaustive way to include d
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Figure E.2 Percentage of low income
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ANNEX FEVALUATION OF HEALTH &ENVIRO
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Figure F.1 Main evaluation methodsS
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- expenditure on capital equipment
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due to air pollution or water conta
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BENEFIT TRANSFER - SELECTED REFEREN
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ANNEX GEVALUATION OF PPP PROJECTSIt
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adjustments for Competitive Neutral
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ANNEX HRISK ASSESSMENTIn ex-ante pr
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Reference ForecastingThe question o
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Figure H.5 Levels of risks in diffe
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ANNEX IDETERMINATION OF THE EU GRAN
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A.4. Technological Alternatives and
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GLOSSARYAccounting period: the inte
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Market price: the price at which a
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BIBLIOGRAPHY1. ReferencesBelli, P.,
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Ray, A. 1984, Cost-benefit analysis
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EnvironmentGeneralAtkinson, G., 200
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European Commission, DG Tren, 2003,
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Guide to COST-BENEFIT ANALYSIS of investment projects - Ramiri

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