Please review the cost-benefit analysis for Central New York Oil & Gas’s proposa

Question

Please review the cost-benefit analysis for Central New York Oil & Gas’s proposal for the construction of a natural gas compression and metering facility submitted to the Tioga County Industrial Development Agency on http://www.tiogacountyny.com/media/2477/crown-cork-seal-cba-final.pdf. What are the primary costs and benefits of the project identified in the application? What additional costs and benefits for Tioga County might there be with the project that are not considered in the report? What type of sensitivity analysis would you recommend be conducted? Why? Based on the information presented in the application, would you support this proposal if you were a member of the Tioga County Industrial Development Agency? Why or why not?

Explanation / Answer

Cost:

Land Purchase $ 1,000,000

Building Construction $ 42,000,000

Equipment purchase $ 89,800,000

Benefits:

Crown CorkØ & Seal USA is creating 164 full time jobs with an associated annual payroll of $7,600,000.

The total wage impact is $488,868,073 over 30 years.

Crown CorkØ & Seal USA is creating 550 construction jobs with an estimated payroll of $25 million.

The Tioga County IDA is offering real property tax savings estimated atØ $44,721,917 over 30 years.

Crown CorkØ & Seal USA will be adding over $11 million in new real property tax revenue

Sensitivity analysis

Not enough data is provided for sensitivity analysis. Especially there is no mention of constraints.

Decision Support

If I were a member of Tioga County Industrial Development Agency, I would have supported a proposal. The biggest reason would be industrialization of Tioga County, as it is our main aim. IT would create more than 700 jobs, which is worth more than tax rebate that we are offering to company.

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.