The National Academies Press

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From page 46... ... 46 By this point in the analysis, the airport has identified and, to the extent possible, monetized the benefits (Chapter 4) and costs (Chapter 5) Read the entire page →
From page 47... ... Compare Benefits and Costs 47 past benefits and costs to current dollar values. The airport staff should determine whether any benefits or costs are expected to increase by more than inflation. Read the entire page →
From page 48... ... 48 Benefit–Cost Analyses Guidebook for Airport Stormwater 6.2 Measures of Value 6.2.1 Quantitative Monetary Metrics Once an airport has identified which benefits and costs can be expressed in monetary terms, it is ready to develop the quantitative metrics that are most effective in helping it evaluate its project(s) Read the entire page →
From page 49... ... Compare Benefits and Costs 49 amount of money were to be received in the future (the time value of money) Read the entire page →
From page 50... ... 50 Benefit–Cost Analyses Guidebook for Airport Stormwater This example shows that an airport should not rely solely on the results of the B/C but should use it to better understand each project. The B/C is a good measure of the return on the investment -- it shows how much airports can get for each dollar invested. Read the entire page →
From page 51... ... Compare Benefits and Costs 51 to determine how efficiently a project addresses a specific concern or outcome identified as important to the airport. In this case, costeffectiveness would be measured as the cost per unit of some outcome, as defined by the airport. Read the entire page →
From page 52... ... 52 Benefit–Cost Analyses Guidebook for Airport Stormwater • Airport staff are conducting the analysis early in the BCA process and potential projects are still being developed or selected, or • The qualitative elements in the analysis are of relatively low priority to the airport in the decisionmaking process, and a highlevel assessment is sufficient. This analysis would require a reasonable assessment of the effects of each qualitative element. Read the entire page →
From page 53... ... Compare Benefits and Costs 53 Analyze each project alternative based on the cost or benefit of interest and identify the native units of that interest. Normalize units to base 10 relative to each other. Read the entire page →
From page 54... ... 54 Benefit–Cost Analyses Guidebook for Airport Stormwater primarily to the social or environmental account. This is likely to be the case if the stormwater project results in significant benefits to water quality beyond those required by the airport's permit. Read the entire page →
From page 55... ... Compare Benefits and Costs 55 important factors, such as the cost of capital, the useful life of the project, and the discount rate, will affect the estimates. The results of a BCA will depend on assumptions and uncertain ties. Read the entire page →
From page 56... ... 56 Benefit–Cost Analyses Guidebook for Airport Stormwater • Use prior projects and design studies for information about stormwater project performance. For example, prior projects and engineering practices provide information about aspects of stormwater system design such as capacity and estimated pollutant removal capa bilities, as well as their associated uncertainties. Read the entire page →
From page 57... ... Compare Benefits and Costs 57 In a more detailed and exhaustive sensitivity analysis, an airport can use statistical analysis, such as a Monte Carlo simulation. Monte Carlo simulations run large numbers of scenar ios for multiple variables, typically producing hundreds of thousands of potential outcomes. Read the entire page →
From page 58... ... 58 Benefit–Cost Analyses Guidebook for Airport Stormwater 50 years, and periodic benefits and costs were discounted the appropri ate number of years for each occurrence. Tables 22 and 23 demonstrate the analysis team's calculation pro cess. Read the entire page →
From page 59... ... Compare Benefits and Costs 59 Option Financial Environmental Social Total NPV Costs 1 -$2.69 $0 $0 -$2.69 2 -$8.6 $0 $0 -$8.60 3 -$8.61 $0 $0 -$8.61 Benefits 1 $0.22 $0 $0.02 $0.24 2 $8.07 $0 $5.16 $13.23 3 $10.2 $0 $5.15 $15.35 Net 1 -$2.47 $0 $0.02 -$2.45 2 -$0.53 $0 $5.16 $4.63 3 $1.59 $0 $5.15 $6.74 Table 25. NPVs for each option (millions of dollars) Read the entire page →
From page 60... ... 60 Benefit–Cost Analyses Guidebook for Airport Stormwater analysis team represented many social costs for Option 1 as benefits in the form of avoided costs under Options 2 and 3. BAY will internalize some of the benefits associated with Options 2 and 3 (in the form of permit noncompliance fines and high water rates) Read the entire page →
From page 61... ... Compare Benefits and Costs 61 of the airport's main sustainability goals, while Option 1 did not meet any. Consequently, Option 1 received a score of 0/4 = 0, and Options 2 and 3 received a score of 3/4 = 0.75. Read the entire page →
From page 62... ... 62 Benefit–Cost Analyses Guidebook for Airport Stormwater score for each option (Step 5) Read the entire page →
From page 63... ... Compare Benefits and Costs 63 expediting under Option 1 from 1 year to 1.5 years. The worstcase scenario would increase costs by 20%, retain the lowend estimate of beach value (original assumption) Read the entire page →

From page 46...

... 46 By this point in the analysis, the airport has identified and, to the extent possible, monetized the benefits (Chapter 4) and costs (Chapter 5)