Part 2
Consider a state owned enterprise is planning to establish a new unit of production of good X
in a rural area of Y, just nearby a lake. Assume that you are assigned to evaluate this project
for the possible outcomes and you have been asked to prepare a small report to consider the
possible benefits and costs of this new production unit.
In particular, you need to make an economic analysis, rather than a financial analysis and
indicate the differences between economic/financial analysis based on this project. Assume
that earnings/costs are certain and it was expected a positive NPV from the project without
any uncertainty.
Write down your report in an essay format, no more than 1500 words. Be specific on
your statements.
When you prepare your report, please make sure
• You clearly identify the differences you will face when you make an economic
analysis, rather than a financial analysis. Make sure you reference the lecture notes on
this issue.