Some unresolved questions in practical project appraisal: indirect taxes and the numeraire

Figures & data

Table 1. Example 1.

t = 0.10	Factor cost	Market prices	Adjusted development cost–benefit approach
Pj = 100	Pj = 100/1.1 = 90.9	Pj = 100	Pj = 100 – 100*(1 – 1/1.1) = 90.9
P n = 50	P n = 50/1/1.1 = 45	P n = 50	P n = 50 – 50*(1 – 1/1.1) = 45
C y = 30	C y =30	C y = 30*1.1= 33	C y = 30
L = 10	L = 10	L = 10*1.1 = 11	L = 10
	NB1 = 5.45	NB2 = 6.0	NB3^1 = 5.45

Table 2. Example 2.

t = 0.10, t f = 0.20, OER = 1.0, SER = OER*(1 + t f ) = 1.2	Adjusted development cost–benefit approach
Pj = 100	Pj = 100*1.2 = 120
P n = 50	P n = 50/1/1.1 = 45
C y = 30	C y =30
L = 10	L = 10
	NB4 = 35

Table 3 Example 3.

t = 0.10, t f = 0.20, OER = 1.0, SER = OER*(1 + t f ) = 1.2	Adjusted development cost–benefit approach
Pj = 100	Pj = 100*1.2 = 120
P n = 50	P n = 50*1.2 = 60
C y = 30	C y =30
L = 10	L = 10
	NB5 = 20