Comparison Of Funding Schemes For The New Campus Construction Of Renmin University Of China

Renmin university of China(Hereinafter referred to RUC)planed to build a new campus in Tongzhou New Town of Beijing in March 2012.The total site area is 128.1 hectares.The Ministry of Education approved that the enrollment of the new campus is 30,000.The campus master plan design is completed in 2013,in which the planning construction scale is 1.0968 million square meters.The estimated investment of the project is about 7.05 billion yuan,and the construction period is about 19 years.In order to efficiently raise funds and compare the financing schemes on different ratios of financial allocations to total investments,this thesis divided the financing schemes into three categories: 50% and above,20%-50%,20% and below,then analyzed the financing source,structure and cost of the three categories.On this basis,using economic evaluation methods,this thesis calculated the financial cash flow,the profitability and solvency,and studied the uncertain analysis by the balance analysis of profit and loss and sensitivity analysis.According to the results,the conclusion and suggestion of the construction financing were put forward.The study indicates that:(1)The dynamic payback period of the three financing schemes is about 23 years,the rate of the total investment profit is about 18%,the internal rate of return(IRR)is greater than the benchmark rate of return,the net present value(NPV)is more than 4.1 billion yuan,and the loan repayment period is within 16 years,all of these shows that the construction project has strong profitability and solvency;(2)It is trend in the same direction between the ratios of financial allocations to total investments and the profitability and solvency,in fact,the greater the ratios put up,the stronger the profitability and solvency enhanced,especially more evident to its own funds;(3)The changes of the ratios of financial allocations to total investments have no marked impact on the breakeven point and the sensitivity;(4)Overall,the breakeven point and sensitivity of the project is very high,thus the anti-risk ability is weak.The project will reach break-even point when RUC notches up 77.2% of the enrollment plan,namely 19,300 students / year.From high to low,the sensitivity factors are the project revenues,the operating costs and the construction investments.When the three factors adverse changes more than 5%,the IRR will lower than the benchmark rate of return,and the project will hard to make a profit.The thesis suggests that:(1)RUC should strive for financial funds as much as possible;(2)RUC should improve the capacity to raise revenues.(3)By adopting the meticulous management,RUC must step up efforts to compress and reduce the operating costs and the unnecessary expenses.(4)RUC should effectively control the engineering costs,in order to reduce the total investments.