Study On Financial Evaluation Of LG Sewage Treatment Project

China’s market economy system perfect, all walks of life from the attention to thedomestic market to go abroad, into the world. In keeping with the international market,State-owned enterprise reform is imperative. State owned enterprises in the market, allowprivate capital into State-owned enterprises, is the future direction of the reform ofState-owned assets, is also the current challenges faced by State-owned enterprises.Meanwhile, the municipal infrastructure construction being carried out in transition,introduced such as BT and BOT mode of operation, namely non-governmental funding ofcivic infrastructure, changed a single relying on financial allocations forms. In General, thegenerally high operating costs of the State-owned enterprises, in a competitive market, toexplore a development road that adapt to changes in the market are all State-ownedenterprises are required to overcome challenges. In reform wave in the, G company as abetween State construction enterprise, in used BT or BOT mode situation Xia, due to fundsrecycling period more long, will makes G company cash stream of pressure very big, so thisfrom financial angle departure, uses g company intends investment LG sewage processingproject for financial evaluation, thereby judgment the project whether for investment, whetherexists feasibility, eventually through LG sewage processing case analysis, answers Stateenterprise in its unique of cost structure Xia operations BT project of financial evaluationmode and steps.Financial assessment is a key part of project investment decision. This article based onthe theory and practice of integrated finance-related, policy makers point of view, applicationof project financial evaluation techniques and tools, LG wastewater treatment project toconduct studies to assess whether the project is worth investing, and G company decided tomake a number of useful recommendations, provided a model for this type of project financialevaluation in the future.The paper mainly studies the following contents:Explains the market development of municipal engineering and project financialassessment of the situation at home and abroad, combined with the LG projects to determinethe dynamic financial analysis and assessment methods to be used in this article. This first tosewage processing project of features departure, briefly to introduced LG project ofconstruction background and the implementation range and content, second in LG project ofconstruction content of based Shang, is expected to the project of total investment and related of cost costs, next in BT operations mode Xia, based on the projected cost of investment andcost, preparation of project cash flow, calculated LG project financial evaluation indicatorsystem, including, profit index of net present value, internal rate of return, and finally for LGproject financing model, financing effect calculations.In summary, LG wastewater treatment project financial evaluation conclusions:(1)based on construction equipment, materials, work estimates based on expected LGwastewater treatment project with a total investment of382.9145million Yuan, the projectcost319.2606million Yuan;(2) in accordance with project funding plan, prepare cash flow,thus calculating project financial evaluation targets, the net present value (NPV) of3.0519million Yuan, and net present value greater than0, the internal rate of return (IRR) of4%,3.3%, is greater than the minimum expected rate of return for investors, the profit index was1.01and greater than1.It can be seen that projects meet the requirements of economicefficiency.(3) the application of sensitivity analysis, project buy-in, discounted rates,equipment, three factors are the most sensitive, and known in the multivariate analysis, andmeet the economic benefits of the project, but there are certain investment risks, measures andrecommend various sensitivities.(3) the LG wastewater treatment project investmentaccounted for two-thirds of proceeds, so judge LG wastewater treatment should be combinedwith elements of investment financing effect analysis. By calculating the interest tax shield,concluded that the best financing options, adjusted net present value of9.2606million Yuan,once again proved LG sewage treatment project has investment value.Based on the analysis of LG financial evaluation of sewage treatment projects, both forG company provide a basis for decision-making, find out more in BT mode, State-ownedenterprises evaluation project financial evaluation methods and procedures available for Gcompany and reference to other companies within the industry.