Quality Education the option does not accommodate the FTE forecast at – maximum utilization Step 2: Evaluate Viable Options Options that meet mandatory criteria are evaluated through quantitative (cost/benefit) analysis, qualitative (advantages/disadvantages) analysis, financing, and preliminary risk assessment Quantitative (Cost/Benefit) Analysis A quantitative analysis provides a preliminary estimate of annual capital and operating costs, including program/service delivery and facility lifecycle costs Prepare a 20-year net present value cash flow analysis for the shortlisted viable options. The term of the cash flow analysis should equal to one of the following: If asset is financed with debt use the term for the debt/mortgage. – If no debt financing required use the expected life of the new – Ensure that assumptions are adequately disclosed for revenue and cost estimates For the lease option, forecast lease rates for the entire 20 year period Include schedules detailing the annual principal and interest payments to accompany the cash flow forecast, as well as for total capital cost estimate The cash flow analysis should reflect the total costs and revenues ‘incremental’ associated with each project option being evaluated, not the cost’ ‘full including existing programs and facilities. However, in cases where the new project/program also results in additional costs or cost savings in existing facilities or programs, these amounts are also to be included in the project incremental cash flow 43. Summary Table of a Quantitative Cost/Benefit Analysis OPERATING YEAR CASH FLOW FORECAST Viable Option 1 – Year 1 Year 2 Year 3 Year 20 Inflow/(Outflow) 201x 201x 201x 4….19 201x Operating Cash Flows Incremental program revenues, by source $ xxx $ xxx $ xxx $ xxx …….. Incremental program costs, by source $ (xxx) $ (xxx) $ (xxx) $ (xxx) …….. Incremental facility operating costs, by source $ (xxx) $ (xxx) $ (xxx) $ (xxx) …….. Interest expense on new debt financings * $ (xxx) $ (xxx) $ (xxx) $ (xxx) …….. Total Operating Cash Flows $ xxx $ xxx $ xxx …….. $ xxx
Quality Education – the option does not accommodate the FTE forecast at maximum utilization Step 2: Evaluate Viable Options Options that meet mandatory criteria are evaluated through quantitative (cost/benefit) analysis, qualitative (advantages/disadvantages) analysis, financing, and preliminary risk assessment Quantitative (Cost/Benefit) Analysis A quantitative analysis provides a preliminary estimate of annual capital and operating costs, including program/service delivery and facility lifecycle costs Prepare a 20-year net present value cash flow analysis for the shortlisted viable options. The term of the cash flow analysis should equal to one of the following: If asset is financed with debt – use the term for the debt/mortgage. If no debt financing required – use the expected life of the new Ensure that assumptions are adequately disclosed for revenue and cost estimates For the lease option, forecast lease rates for the entire 20 year period Include schedules detailing the annual principal and interest payments to accompany the cash flow forecast, as well as for total capital cost estimate The cash flow analysis should reflect the total ‘incremental’ costs and revenues associated with each project option being evaluated, not the ‘full cost’ including existing programs and facilities. However, in cases where the new project/program also results in additional costs or cost savings in existing facilities or programs, these amounts are also to be included in the project incremental cash flow 43. Summary Table of a Quantitative Cost/Benefit Analysis CASH FLOW FORECAST – Viable Option 1 Inflow/(Outflow) OPERATING YEAR Year 1 201x Year 2 201x Year 3 201x 4….19 Year 20 201x Operating Cash Flows Incremental program revenues, by source $ xxx $ xxx $ xxx …….. $ xxx Incremental program costs, by source $ (xxx) $ (xxx) $ (xxx) …….. $ (xxx) Incremental facility operating costs, by source $ (xxx) $ (xxx) $ (xxx) …….. $ (xxx) Interest expense on new debt financings * $ (xxx) $ (xxx) $ (xxx) …….. $ (xxx) Total Operating Cash Flows $ xxx $ xxx $ xxx …….. $ xxx
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