The Economic Value of Main Report

initial supply chain (i.e., the indirect effect), and the income created by the increased spending of the household sector (i.e., the induced effect). The North American Industry Classification System (NAICS) classifies North American business establishments in order to better collect, analyze, and publish statistical data related to the business economy. Benefits minus costs, i.e., the sum of revenues accruing from an investment minus costs incurred. Net cash flow discounted to the present. All future cash flows are collapsed into one number, which, if positive, indicates feasibility. The result is expressed as a monetary measure. Benefits forgone from alternative B once a decision is made to allocate resources to alternative A. Or, if individuals choose to attend college, they forgo earnings that they would have received had they chosen instead to work full-time. Forgone earnings, therefore, are the “price tag” of choosing to attend college. Length of time required to recover an investment. The shorter the period, the more attractive the investment. The formula for computing payback period is: Income received from investments, such as rent, interest, and dividends.

NAICS

Net cash flow

Net present value

Non-labor income

Opportunity cost

Payback period

Payback period = cost of investment/net return per period

The economic value of Monroe Community College

87