Study On Financial Evaluation Of Gaoling Reservoir Expansion Project

With the rapid development of the socialist market economy and accelerating the urbanization process, the water consumption in both city and countryside is increasing year by year, the water resource shortage is becoming a big problem all over the country. Yantai city located in the northeast of shandong peninsula, lying in the national Planning Area of blue ocean economy and being one of the cities of jiaodong peninsula urban clusters which is now developing further.its population is increasing rapidly and the relevant industries are developing in a high speed, It has to face the severe problem of water shortage. In order to solve the problem, we have to rebuild and enlarge the Gaoling reservoir of Muping on the basis of its original construction, The reservoir needs to be extended to impound much more water. And water conservation district should be enlarged enough to cover the water resource. Therefore, it will supply fine and much more water for people live in both urban and rural area in Yantai city. This is the fundamental way out to solve the serious lack of water resource for Yantai local economic development.By the way of field investgation and looking up the reference documents, combining static analysis and dynamic analysis, combining qualitative analysis and quantitative analysis, integrating theory with practice and so on, Author used many kinds of methods to study this project according to the actual situation for rebuilding and enlarging the Gaoling reservoir, The author carried out a proper financial evaluation system to construct and analysis of financial evaluation for the local government, investors, creditors and reservior district residents. Therefore the author made the project financial feasibilty evaluation conclusion.The project is profitable obviously according to the formulas and the calculations, which calculated the financial indexes in different perspectives:The average annual tax income will be 16,540,000.00 yuan; it will increase an average anual GDP value of 102,450,000.00 yuan;the investment recovery period of this project is 15.465 years (the life cycle of the project is 30 years);its investment profit rate is 15.05%(the national current commercial beyond five-year lending rate is 6.15%);the internal rate of return is 17.03%(the industry reference value is 7%);the loan risk index is 0.2726(the risk index between 0.2 and 0.4 is lower risk); the living allowance for the reservoir area residents can meet their minimum requirements every year. All the above mentioned results are the financial evaluation basises of each core interest subject.According to the above-mentioned calculation results, the financial evaluation and analysis of the core interest subjects were made. Finally, combining all the financial evaluations of the core interest subjects, it is concluded that Gaoling reservoir expansion project can meet all core interest subjects’targeted interest, therefore,it has the financial feasibility.