Use the internet and other sources to research and evaluate historical and present economics associated with the production of palm oil in Borneo. Define in precise terms how important the industry is presently to the economy of Borneo.
Submit: A report (pdf) plus excel spreadsheet. The report is to be no longer than
~2000 words (penalties will be applied if exceeded by more than 20%).
Format: Type using 12 font size, arial or times new roman font, single line
spaced. Structure sentences into paragraphs, leaving a single blank line
between paragraphs. Use your excel spreadsheet to generate graphs
which explain the analysis that you have undertaken. Organise your
report into sections with headings and sub-headings, and then auto
generate a table of contents (TOC) using your report headings. Describe
all findings from your excel spreadsheet analysis in your report, as your
excel spreadsheet will be looked at only briefly.
References: Include a single reference list at the end of the report. Try to source
some refereed journal (ie. non-internet) high quality references. Use intext
citation of your references. The Harvard system of referencing must
be used. Do not use too many references, just cite the most important/
Extension policy: No extension allowed except in extenuating circumstances – see Course
Warning about plagiarism
You will be severely penalised if it is found that you have copied verbatim from the work of other authors, including
from web sites. You may quote the work of others but quotations should be used sparingly. For each question,
quotations should amount to no more than 5 per cent of the specified word limit for that question, and each quotation
must be cited correctly.
Plagiarism detection software may be used to check your assignment.
To answer the assignment questions you are expected to consult your study package and other sources. However, the
work you submit as your own work has to be in your own words. You are encouraged to discuss the concepts covered
in the assignment questions with your classmates and others, but you should not release your written responses to the
questions to anyone except the University. Students submitting a section or sections of assignment work which is the
same as other students’ work will be severely penalised.
Further information about plagiarism can be found on the University website.
Assignment Two Task – spreadsheet and report (word limit : 2000) (200 marks)
Economic analysis of future Palm Oil Production in Borneo
1) Use the internet and other sources to research and evaluate historical and present
economics associated with the production of palm oil in Borneo. Define in precise terms
how important the industry is presently to the economy of Borneo.
2) Imagine that you are the chief engineer working for a large international firm in Borneo,
and that government of Borneo has asked your best advice. What alternative forms of
agriculture/industry it might be appropriate for Borneo to invest into, and what is the
likely level of investment required ? What employment would be provided and what
would be the likely ‘flow-on-benefits’ from your chosen alternative enterprise ?
3) Set up an excel spreadsheet (similar to the example provided to you on ENG2002
studydesk, named NPVCalc). Set up your spreadsheet to calculate, using the Net Present
Value (NPV) economic calculation method, the future profitability of the industry. Use
your spreadsheet to calculate the effect of the following scenarios :-
i) reducing palm oil investment by 5% each year for the next 50 years and/or
ii) increasing palm oil investment by 5% each year for the next 50 years and/or
iii) maintaining palm oil investment at the current level (NPV level) for the next 50
years and/or indefinitely
Please note that you can run scenario (i) where new agriculture/industry gradually competes
with and replaces earlier enterprises. Run your NPV simulations (graphical analysis) using
interest rates on borrowed money scenarios of 3,6,9,12,15 and 18%.
NB. if the cost of borrowing money is added to all the other business costs, eg. asset and
equipment depreciation, maintenance costs, labour costs, government taxation, cost of
environmental rehabilitation, and falling future commodity price due to competing industries,
then this can be all added together to produce what is known in economics as the ‘discount
rate’. Based upon historical performance data, this is what banks and lending institutions use
to assess risk, and it is how they calculate what interest rate to charge against money lent to
the various different industries.
4) Of course you have to research, study and make many assumptions (educated guesses)
with this type of economic analysis, eg. future commodity prices, growth/stagnation in
population and other parts of the economy. Clearly state your assumptions in the
methodology section to your report.
5) Summarise the finding of your economic analysis in a report no longer than 2000 words,
or about ten pages in length including diagrams (including graphs).
A marking rubric will be used to provide you with feedback when your assignment is
marked. It will be based upon :-
1) Quality/organisation of findings, as written and produced in the report (20%)
2) Quality/organisation of excel spreadsheet based future profitability analysis (20%)
3) Quality, description and interpretation of graphs, as produced in the report (20%)
4) Clear statement of assumptions made in your analysis (20%)
5) Level/quality of background research undertaken (20%)