The Economic Value of WTAMU Main Report

Multiplier effect Additional income created in the economy as the university
and its students spend money in the region. It consists of the income created
by the supply chain of the industries initially affected by the spending
of the university and its students (i.e., the direct effect), income created by
the supply chain of the initial supply chain (i.e., the indirect effect), and the
income created by the increased spending of the household sector (i.e.,
the induced effect).
NAICS The North American Industry Classification System (NAICS) classifies
North American business establishment in order to better collect, analyze,
and publish statistical data related to the business economy.
Net cash flow Benefits minus costs, i.e., the sum of revenues accruing from
an investment minus costs incurred.
Net present value Net cash flow discounted to the present. All future cash
flows are collapsed into one number, which, if positive, indicates feasibility.
The result is expressed as a monetary measure.
Non-labor income
and dividends.
Income received from investments, such as rent, interest,
Opportunity cost Benefits foregone from alternative B once a decision is
made to allocate resources to alternative A. Or, if individuals choose to
attend college, they forego earnings that they would have received had
they chose instead to work full-time. Foregone earnings, therefore, are the
“price tag” of choosing to attend college.
Payback period Length of time required to recover an investment. The shorter
the period, the more attractive the investment. The formula for computing
payback period is:
Payback period = cost of investment/net return per period
Appendix 2: Glossary of Terms
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