Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44 Page 45 Page 46 Page 47 Page 48 Page 49 Page 50 Page 51 Page 52 Page 53 Page 54 Page 55 Page 56 Page 57 Page 58 Page 59 Page 60 Page 61 Page 627 Step 4: Estimate required investment As explained in more detail in section 3.3 the cost of setting up and running ranger programs has been estimated by Rob Thomas, of In Common Consulting based on his experience with designing and implementing programs against a similar socio-economic context within the southern rangelands (e.g. Wiluna Region) and validated by comparing these estimates with the investments made into other existing ranger programs. Step 5:  Calculate the Benefit Cost Ratio (using discounted cash flow (DCF) modelling) The value of costs and benefits are projected to occur into the future and are discounted to 2016/17 dollar terms using a traditional DCF framework. As per PM&C Office of Best Practice Regulation (OBPR) guidance: • Inflation has not been applied to future benefits and costs • Costs and benefits have been calculated in real terms •  A real discount rate of 7% per annum has been adopted (although a sensitivity test has been completed utilising a lower bound discount rate of 3% and an upper bound discount rate of 10%) •  Once the future values are discounted, the value of costs and benefits in net present terms (NPV) are compared to derive a BCR. The BCR is an indicator that attempts to summarise the overall value for money of a project or proposal. The BCR is a comparison of the value of the projected benefits to the value of the estimated investment. It’s expressed in numerical terms e.g. 3.7:1 which means that for every dollar invested, an estimated $3.7 of value will be returned. In this report we have calculated two BCR’s: 1. Holistic case = Outcomes realised for all stakeholders / total investment 2. Government outcomes only case = Outcomes realised for Government / total investment Step 6: Undertake sensitivity analysis It is important that BCR calculations are tested by understanding how the judgements made throughout the analysis affect the final result. The judgements that are most likely to influence the overall BCR ratio were identified as well as those which are backed in the least robust evidence, and a sensitivity test was conducted to see how sensitive the BCR’s are to changes in the judgements. Further detail about the methodology, including indicators and financial proxies used to calculate values, is set out in the methodological attachment to this report. 2 https://www.dpmc.gov.au/office-best-practice-regulation/publication/cost-benefit-analysis-guidance-note