Economic Evaluation Of Private Colleges And Universities Projects Based On System Dynamics

With the rapid development of economy, science and technology of China, people have a growing demand for own education level and the need of the society and market is increasing.For the better development of China’s education career and corresponds to the public demand,in executive meetings of the State Council held by state council premier Li Keqiang in July2013, it was proposed in the meeting that the government would purchase public services from the society powers, which provides a good opportunity for the rapid development of Chinese private colleges and universities. However, with the growing increase of investment of private colleges and universities, a number of private colleges and universities project are paid insufficient attention in economic evaluation and finally come to the verge of bankruptcy after operation, which causes certain loss for the country, investors as well as the students of the school and their families. As a result, it is very necessary to carry out scientific and effective economic evaluation of private colleges and universities projects.Economic evaluation of projects means comprehensive investigation study, analysis and comparison, prediction of financial situation of the project from the investor’s perspectives involving market, economy, finance and society so as to choose the optimal scheme on the basis of the feasibility of the project.System dynamics is an applied science of dynamic behavior based on the feedback control to explore the causal relationship of various changes of the system and internal elements through the establishment and operation of computer simulation model to solve the dynamic social and economic problem with a new perspective. This paper studies the calculation phases of economic evaluation of private colleges and universities involving construction and operation period as a large system. This paper, based on system dynamics,constructs private colleges and universities’ project economic evaluation model from 7aspects including investment and financing, requirement, faculty, income and expenditure,balance, cash flow and net present value, and uses professional languages of system dynamics to more intuitively reflect the relationship of economic evaluation system factors of the project so as to provide innovative method and reasonable and reliable basis for project investment and decision-making.This paper, taking XX College as an example, uses Vensim simulation software to simulate 20 years’ construction and operation of the school and judges the feasibility of the project based on the effectiveness of parameter detection model actually obtained and the net present value obtained from the operation. Besides, based on sensitivity analysis,simulation is used to find the key factors affecting the economic evaluation results of the project, which provides scientific basis for project investment decision-making, focus for the actual implementation as well as scientific basis for realization of operating purposes.