The scope of this assignment is to gain experience in completing an economic analysis for a business venture related to an investment project. Your task will be to combine economic theory with the tools of present worth analysis that we will discuss in class for an investment/project of your choice. The analysis has to be thorough in the sense that you are not only required to examine the present worth of the project but you will need to use the tools of economic theory that we have discussed in class to comment/justify your own projections of costs and revenues for future periods taking into account the microeconomic environment and the risks that you will have to face. The following detailed description will guide you in the steps you need to follow – also a suggested format for your paper with additional instructions will be provided: Part 1: Stating the Objective 1) Start by identifying a topic of interest. You will need to identify a project that is either related to your job or a project/business venture that you intend to get involved with in the future. It can, for example, be a project related to starting up a business of your own. You could discuss the prospects of opening a café at the Marina or you could choose to study the market promotion of an innovation you came up with (or intend to work on) such as a new application for I-phones that you have created which allows I-phone users to emulate software on their Windows PC (I hope that you understand that these are just two examples that I came up with). You can choose any topic that you want as long as it is “relatively” realistic (– do not discuss your intention to market an antigravity automobile or commercial space-travel!!…..) Part 2: Identifying the Costs/Benefits and the Method 2) Identify the initial costs to start up your business and the time required to build a prototype (if relevant). Also identify the relevant costs for promoting the project in the market as well as operating costs after you launch your product and other costs that you think will be relevant to your analysis. Please note that the costs that I am referring to are just some of the costs that you will have to deal with. You will need to identify all relevant costs. At this stage you should simply identify them, do not try to add a number to these costs yet. 3) Identify the benefits/revenues in a similar manner. The revenues that you intend/hope to achieve by selling your product, benefits from networking, from advertisements, from copyrights etc. 4) Identify the relevant time frame for your venture in your analysis. Also identify the most relevant method to approach the problem at hand, that is, decide whether you intend to use the Net Present Value (NPV) method, the Internal Rate of Return (IRR), the Payback method etc., clearly presenting arguments that justify your choice with respects to the advantages/disadvantages of the method you choose. Part 3: Conduct the Analysis 5) Now start by assigning projected values to both your costs and your revenues. These projections of costs/revenues should be carefully discussed using economic analysis and thoroughly researched using the existing literature on both the microeconomic and the macroeconomic environment. I.e. see what the expectations for inflation are for the years ahead in order to come up with more accurate projections on how possible inflationary pressures will affect the market demand for your product or see how the exchange rate, international markets, technology, competition, substitute products, market entry etc. is expected to affect your estimates. Refer to relevant industry sources (journals, newspapers, etc.), and provide a reference list using the Harvard Referencing Style. Use any diagrams you see fit and present appropriately and clearly to your reader. This part should not be taken lightly and should take a good part of your total project. 6) Use any spreadsheet package to estimate the necessary statistics and come up with an investment decision. Properly present those statistics using any diagrams necessary. Use the concepts of NPV, IRR or any other relevant concepts you find appropriate as discussed in section 4. 7) Employ sensitivity/scenario analysis to come up with suggestions/actions that would help your decision. Also discuss the financing of your project somewhere between sections 5 and 7. Part 4: Summary of the Results: Discussion and Recommendations 8) Discuss the results of your analysis and make recommendations to help ensure the success of your venture. This part should also not be taken lightly. The conclusions section is where you need to summarize what you did, summarize your findings and convey/promote the attractiveness of your idea to the non-specialized reader who is the likely candidate to angel finance your idea.