Cost/Benefit Analysis of the Hercules Country Club

Abstract

The objective of this paper is to conduct an ex ante (before the project) cost/benefit analysis (CBA) of the Hercules Country Club (CC). Two alternatives are evaluated: (A) preserve land for 205-acre county park and (B) develop 205-acre site for 258 homes. The project standing is the Red Clay Creek watershed in New Castle County, Delaware with a population of 23,500 residents in 2015. The discount rate over a 30-year assumed project life is 3%. The CBA employs the equation: Net Present Value (NPV) = Present Value Benefits (B) minus Present Value Costs (C) or NPV = B – C (Boardman 2001). The alternative with the highest NPV provides the most economic benefits to society.