The bamboo processing manufacturer of this study case is located in Jhushan Township, Nantou County. They use Makino bamboo as the main raw material to produce bamboo sticks for BBQ. The process of producing bamboo sticks is as follows: (1) remove the bamboo joints and then cut and slice bamboo tubes according to the size requirements; (2) bundle the cut bamboo slices into bunches and soak them in water to soften; (3) after softening, use a slicing machine to thin the bamboo slices to make semifinished bamboo sticks; (4) fumigate the semifinished products for bacteriostatic purposes; (5) then use steam heat to dry the semifinished products; and (6) after drying, the semifinished products were sanded, trimmed and sharpened and then packed. During the process, removing bamboo joints, cutting bamboo tubes, and thinning bamboo slices will produce waste materials such as bamboo joints and bamboo slivers. These waste materials were impossible to use for purposes other than recycling to make joss paper in the past. If they are not effectively removed, they will easily accumulate in large quantities and cause environmental problems (Fig. 1).

To solve these problems, the Taiwan Forestry Research Institute conducted a preliminary trial of the heat value of bamboo fuel pellets (rods), and the average heat value reached 4,300 cal/g, which met the basic need if used as fuel pellet energy. Therefore, the institute provided technical guidance to assist in the construction of the process for producing bamboo fuel pellets (rods) from bamboo waste materials. The equipment consists of three modules: crushing, drying, and pelletizing (rods). The process sequence of bamboo fuel pellets (rods) is described as follows: (1) Crushing operation: crush the bamboo waste materials into 1–2 mm uniform granular materials; (2) Drying operation: use the drying system to reduce the moisture content of the granular materials to 10–15%; (3) Pelletizing operation: after drying, the material was sent to the pelletizing system for pelletizing (rods); (4) Cooling operation: the bamboo fuel pellets (rods) products that were initially formed by the pelletizing system need to be kept at room temperature before packaging and shipping.

## 2.2. Analysis method

This study applied techno-economic analysis and cost-benefit analysis to evaluate the economic benefits of using bamboo waste materials to produce bamboo fuel pellets (rods). The techno-economic analysis is one of the evaluation methods for engineering technology projects. The study areas include technical and economic issues at the national, industrial, enterprise, and engineering levels, aimed at addressing the economic issues in technical or engineering projects to explain the economic significance of the projects and bring forward a feasibility evaluation (He and Ren, 2019). Techno-economic analysis is mainly composed of three knowledge aspects, including (1) the knowledge of the rules and characteristics of technological innovation, which are the principles, motivations, organizational systems, precipitating and promoting factors; (2) the knowledge of the interaction or influence between technology and economy, aimed at focusing on the contribution of technology to economic growth, including the analysis of its principles, contribution rates, etc.; and (3) the knowledge of application, which mainly includes the evaluation of the economic effect of technology, the economic concept of the process of technology application, the methods of evaluating the economy of technology practices, the economic benefits of technical activities, and the data receiving and processing, etc. (He and Ren, 2019; Zhang et al., 2017). Cost-benefit analysis is one of the important economic decision-making methods for traditional economic analysis to evaluate whether investment decisions are feasible. It provides an objective and rational framework to estimate the use of additional resources (costs) to compare the recovery benefits and evaluate the appropriateness of implementing this decision. CBA not only considers the impact of the budget on the plan but also considers the positive and negative results of the decision to seek the greatest benefit at the lowest cost (Keilty, 2001). There are many cost-benefit analysis methods if adding techno-economic analysis for project evaluation, and they can be divided into the net present value method, net present value rate method, internal rate of return method, external rate of return method, present value cost method, net annual value method, annual cost method, profitability index method, self-liquidating ratio, dynamic investment payback period, etc. (Khootama et al., 2018). Each analysis method is described as follows:

(1) Net Present Value Method (NPV)

The net present value index is one of the most important indicators for the dynamic evaluation of investment projects. This index requires examining the annual cash flow during the life of the projects. The net present value is the cumulative sum of the present value of each year’s net cash flows discounted to the same point in time (usually at the beginning) according to a certain discount rate. For a single item of the project, when NPV ≥ 0, the item should be accepted; when NPV < 0, the item should be rejected (He and Ren, 2019). The formula for the net present value is as follows:

$$NPV=\sum _{t=0}^{n}{\left({C}_{I}-{C}_{O}\right)}_{t}{\left(1+{i}_{0}\right)}^{-t}=\sum _{t=0}^{n}{\left({C}_{I}-K-{C}_{O}^{‘}\right)}_{t}{\left(1+{i}_{0}\right)}^{-t}$$

In the formula, *NPV* is the net present value; *C**It* is the cash inflow in year *t*; *C**ot* is the cash outflow in year *t*; *K* is the investment expenditure in year t; \({C}_{O}^{’}\) is the cash outflow other than investment expenditure in year *t*; *n* is the lifespan of the item; and \({i}_{0}\)is the benchmark discount rate.

(2) Net Present Value Rate Method (NPVI)

When comparing multiple projects, although the net present value method can reflect the profit and loss of each project, it cannot reflect the efficiency of the utilization of capital because the investment amount is not considered. The net present value rate method is the ratio of the net present value of the project and the present value of the total investment, also known as the net present value index, that is, the net present value brought by the unit of investment present value (He and Ren, 2019). The formula for the net present value rate is as follows:

$$NPVI=\frac{NPV}{{K}_{P}}=\frac{\sum _{t=0}^{n}{\left({C}_{I}-{C}_{O}\right)}_{t}{\left(1+{i}_{0}\right)}^{-t}}{\sum _{t=0}^{n}{K}_{t}{\left(1+{i}_{0}\right)}^{-t}}$$

In the formula, *NPVI* is the net present value index; *NPV* is the net present value; *K**p* is the present value of the total investment; *C**It* is the cash inflow in year *t*; *C**ot* is the cash outflow in year *t*; *K**t* is the investment expenditure in year *t*; *n* is the lifespan of the item; and \({i}_{0}\) is the benchmark discount rate.

(3) Present Value Cost Method (PC)

When comparing multiple projects, if the output value of each project is the same or can meet the same needs but the output benefit is difficult to estimate, the present value cost method can be used to compare the advantages and disadvantages. The project with the smallest present cost value among multiple projects is the best, but the economic feasibility of a single project cannot be assessed (He and Ren, 2019). The formula for the present value cost method is as follows:

$$PC=\sum _{t=0}^{n}{C}_{0t}{(1+{i}_{0})}^{-t}-{C}_{It}{(1+{i}_{0})}^{-t}$$

In the formula, *PC* is the present value of cost; *C**It* is the cash inflow in year *t*; *C**ot* is the cash outflow in year *t*; *n* is the lifespan of the item; and \({i}_{0}\)is the benchmark discount rate.

(4) Net Annual Value Method (NAV)

The net annual value allocates the net present value of the project to the equivalent annual value of each year over the lifespan through the conversion of the equivalent value of capital. When NAV ≥ 0, the item is acceptable in terms of economic effects; when NAV < 0, then the item should be rejected in terms of economic effects (He and Ren, 2019). The formula for net annual value is as follows:

$$NAV=NPV\frac{{i}_{0}{(1+{i}_{0})}^{n}}{{(1+{i}_{0})}^{n}-1}=\sum _{t=0}^{n}{\left({C}_{I}-{C}_{O}\right)}_{t}{\left(1+{i}_{0}\right)}^{-t}\frac{{i}_{0}{(1+{i}_{0})}^{n}}{{(1+{i}_{0})}^{n}-1}$$

In the formula, *NAV* is the net annual value; *NPV* is the net present value; *C**It* is the cash inflow in year *t*; *C**ot* is the cash outflow in year *t*; *n* is the lifespan of the item; and \({i}_{0}\) is the benchmark discount rate.

(5) Annual Cost Method (AC)

The annual cost and the present value cost are both applied to the comparison of multiple plans, and the best project is the one with the smallest annual cost value (He and Ren, 2019). The formula for the annual cost method is as follows:

$$AC=PC\frac{{i}_{0}{(1+{i}_{0})}^{n}}{{(1+{i}_{0})}^{n}-1}=\sum _{t=0}^{n}{C}_{0t}{\left(1+{i}_{0}\right)}^{-t}\frac{{i}_{0}{(1+{i}_{0})}^{n}}{{(1+{i}_{0})}^{n}-1}$$

In the formula, *AC* is the annual cost; *PC* is the present value cost; *C**ot* is the cash outflow in year *t*; *n* is the lifespan of the item; and \({i}_{0}\)is the benchmark discount rate.

(6) Internal Rate of Return Method (IRR)

Although the net present value method is simple and easy to implement, it must have a base earning rate to calculate, and the internal rate of return method makes up for the deficiency of the net present value method. This method does not require a given discount rate in advance, and the calculation results can reflect the actual investment efficiency achieved by the project. The internal rate of return is the discount rate when the net present value is equal to zero. When *IRR ≥ i**0*, the project is feasible in terms of economic effect; when *IRR < i**0*, the project is unacceptable in terms of economic effect (He and Ren, 2019). The formula for the internal rate of return method is as follows:

$$NPV\left(IRR\right)=\sum _{t=0}^{n}{\left({C}_{I}-{C}_{O}\right)}_{t}{\left(1+IRR\right)}^{-1}=0$$

In the formula, *IRR* is the internal rate of return; *NPV* is net present value; \({C}_{It}\) is the cash inflow in year *t*; \({C}_{ot}\)is the cash outflow in *year t*; and *n* is the lifespan of the item.

(7) External Rate of Return Method (ERR)

Since the internal rate of return method is used for calculation, it assumes that all net incomes earned over the life of the project can be reinvested, and the earning rate on reinvestment is equal to the internal rate of return of the project. However, due to the limitation of investment opportunities, this assumption is usually difficult to meet in the actual situation. This also causes the IRR formula of unconventional investment plans to have multiple solutions. The external rate of return method is a modified version of the internal rate of return method. It assumes that all net incomes obtained during the life of the project can be fully reinvested, but the earning rate on investment is equal to the benchmark discount rate, that is, the discount rate that makes the present value of a total investment equal to the final value of the total revenue. When *ERR ≥ i**0*, the project is feasible in terms of economic effect; when *ERR < i**0*, the project is unacceptable in terms of economic effect (He and Ren, 2019). The formula for the external rate of return method is as follows:

$$\sum _{t=0}^{n}{NB}_{t}{(1+{i}_{0})}^{n-t}=\sum _{t=0}^{n}{K}_{t}{(1+ERR)}^{n-t}$$

In the formula, *ERR* is the external rate of return; \({NB}_{t}\) is the net income in year *t*; *K**t* is the net investment in year *t*; n is the lifespan of the item; and \({i}_{0}\)is the benchmark discount rate.

(8) Profitability Index Method (PI)

The profitability index method is the ratio of the present value of future cash flows to the investment amount, that is, the "total present value of cash inflows" that can be obtained for each dollar of "initial investment amount", also known as the Benefit Cost Ratio. The advantage is that it is easy to calculate and very effective for independent investment cases but may be disadvantageous for mutually exclusive investment cases. If *PI ≥ 1*, the investment is accepted; if *PI ≤ 1*, the investment is rejected; if *PI = 1*, then accept or not, there is no difference. The formula for the profitability index method is as follows:

$$PI=\frac{\sum _{t=0}^{n}{C}_{It}{\left(1+{i}_{0}\right)}^{-t}}{\sum _{t=0}^{n}{C}_{Ot}{\left(1+{i}_{0}\right)}^{-t}}$$

In the formula, *PI* is the profitability index; \({C}_{It}\) is the cash inflow in year *t*; \({C}_{ot}\)is the cash outflow in year *t*; n is the lifespan of the item; and \({i}_{0}\)is the benchmark discount rate.

(9) Self-Liquidating Ratio (SLR)

The self-liquidating ratio is the ratio of the total present value of the net cash inflows to the total present value of the cash outflows in each year, that is, the proportion of the cost spent that can be recovered from the net income. In contrast, (1-self-liquidating ratio) the non-self-liquidating portion of the project, the proportion of the cost incurred that cannot be reclaimed from net income. If *SLR ≥ 1*, it means that the project is fully self-liquidating and the investment is accepted; if *0 < SLR < 1*, the project is not fully self-liquidating and needs other organizations (such as the government) to participate in the investment; if *SLR ≤ 0*, then this plan is not accepted. The formula for the self-liquidating ratio method is as follows:

$$SLR=\frac{\sum _{t=0}^{n}{C}_{It}}{\sum _{t=0}^{n}{C}_{Ot}}\times 100\%$$

In the formula, *SLR* is the self-liquidating ratio; \({C}_{It}\) is the cash inflow in year *t*; \({C}_{ot}\)is the cash outflow in year *t*; and n is the lifespan of the item.

(10) Dynamic Investment Payback Period (T)

The investment payback period is the time it takes for the net income obtained from each year to compensate for all the investments after the project is put into operation, and the time value of the capital is also taken into consideration. The formula of the dynamic investment payback period method is as follows:

$$\sum _{t=0}^{{T}_{p}^{＊}}{\left({C}_{I}-{C}_{O}\right)}_{t}{\left(1+{i}_{0}\right)}^{-t}=0$$

In the formula, \({T}_{p}^{＊}\) is the dynamic investment payback period; \({C}_{It}\) is the cash inflow in year *t*; \({C}_{ot}\)is the cash outflow in year *t*; and \({i}_{0}\)is the benchmark discount rate.