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WinDASI Exercise: NGAMO 2: An irrigation project. Impacts of irrigation and mechanisation on traditional farms 

Year of publication 2005

Pages 36 p.

Author Bellù, L.G.

Publisher FAO ;

Product type Document

Series title EASYPol: Resources for policy making

Edition 1

Synopsis (short abstract) This module presents NGAMO2, a practical step-by-step exercise in Cost Benefit Analysis (CBA) of investment projects, to be run with the WinDASI software. (the word NGAMO comes from the name of the zone of the original project that was located in Myanmar). The goal of this exercise is to analyze the technical feasibility of the irrigation project at farm level. The project analyst has to solve two major problems due to the expansion of production generated by the new irrigation scheme: excess de mand of labour compared with the supply available form the farm household and a lack of draught animals in the peak periods. The reader will see how project constraints are solved and which are the main changes with versus the without project situations (WiP versus WoP). Moreover, a new constraint is introduced, which is the financing constraint, with the purpose to analyze the economic impact of the credit component by calculating project indicators such as incremental NPV, IRR and Benefit/Cost Ratio and comparing them before and after the financing.

Language English

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    This module illustrates how to carry out cost-benefit calculations of investment projects in WinDASI, after data are inserted in the database. It explains, by means of a step-by step procedure, how to calculate: a) flows of physical quantities of outputs, inputs and investment items; b) flows of current, discounted and cumulative costs, benefits, and net benefits; c) flows of incremental (With-Without project) current, discounted and cumulative net benefits; and e) project indicators such as the Net Present Value (NPV), the Internal Rate of Return (IRR), the Benefit/Cost Ratio, (BCR), the Switching Values (SVs) and Sensitivity Analysis. Instructions are provided on how to carry out calculations for the different components of an investment project, notably: plans, zones and projects (i.e. at different levels of aggregation). In addition, this module addresses normal and phased mode of calculation and comparisons of different projects alternative scenarios (with–project versus without-p roject).
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