Sample Essay
Words 1,230
This essay is on a history of Alaska’s mega projects. In 1980s in Alaska, there was great deal of expansion and investment both in the agricultural sector and in the energy sector.
I.
In 1980s in Alaska, there was great deal of expansion and investment both in the agricultural sector and in the energy sector. The projects in the two sectors were:
q Agricultural Projects
- Delta Agricultural Project
- Seward Grain Terminal
- Point McKenzie Agricultural Project
- Matanuska Maid Dairy
- McKee Slaughterhouse
- Mt. McKinley Meats
q Energy Projects
- Susitna
- Bradley Lake hydroelectric projects
- Four Dam Pool
- Railbelt Electrical Interties
- Healy Clean Coal project
q Alaska Seafood International fish processing facility
q Alaska Petrochemical Company
II.
The categories of Cash Flows for the businesses were:
Agricultural Projects
- Delta Agricultural Project: operating Cash flows
- Seward Grain Terminal: investing Cash flows
- Point McKenzie Agricultural Project: Financial Cash flows
- Matanuska Maid Dairy: Operating Cash flows
- McKee Slaughterhouse: Financial Cash flows
- Mt. McKinley Meats: Financial Cash flows
Energy Projects
- Susitna: Financial Cash flows
- Bradley Lake hydroelectric projects: Financial Cash flows
- Four Dam Pool: Operating Cash flows
- Railbelt Electrical Interties: Investing Cash flows
- Healy Clean Coal project: Investing Cash flows
Alaska Seafood International fish processing facility: Investing Cash flows
Alaska Petrochemical Company: Financial Cash flows
III.
Since the projects being analyzed are nor from a single industry and the investment is in form of different types of loans, in addition the variety of cash flows make the present value methodology more appropriate to use in the situation, therefore the author has used that to evaluate the projects, to assess whether any of the projects under consideration were profitable financially.
Applying NPV analysis requires to make judgments about factors associated with the project such as:
- Revenues
- Expenses
- Depreciation
- True economic lives of plant and equipment
- The appropriate discount rate
The important benefit of NPV analysis is that it keeps the suppositions separate from the deductions. It forces one to be clear about the a range of components that control the likely success or failure of the project and present one’s reasoning in a framework that is amenable to review, analysis and discussion with others.
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