Sabine N Konig. Worksheet Templates. February 08th , 2018.
Taking action can be the hardest part to the entire process. Just getting started is what stops most people dead in their tracks, content with wishing and blaming their situation on anything else. Truth is, if you never take action, you can not ever get past the wishing stage.
When coming to the share of future toll revenues, Dave gets creative. The company has never done this before and both the toll fares and actual volume of traffic over the bridge are unknown. In a separate tab in his cash flow worksheet, Dave creates two grids. The first is a range of car traffic volumes from 10,000 to 30,000 cars per day (the volume range used by the engineers to build the bridge). He applies a growth rate multiplier and extends the grid to the right for 10 years, multiplying each time step by a growth multiplier. He then builds a similar grid of toll fees and toll growth rates and arrays them to the right for 10 years. Finally, Dave uses his Excel statistical analysis add-in to generate a probability distribution of toll revenues for each year. Dave creates 5 scenarios based on the mean toll revenue, with revenues varying plus and minus one and two standard deviations to get 5 estimated cash flow paths.
Dave times the initial payment to coincide with the project start date, which will cover foundation materials, site excavation, and pile drilling costs. The other two payments are timed to fall 6 months after the completion of Phases 2 and 3, which are the bridge structure building, and construction of he roadway and toll facilities.
Extra Smart Partners has received an RFP from the City of Metropolis to kick off a new bridge over the Eastern River. The ESP engineers and project managers have estimated the necessary materials and manpower to build the bridge. Now its Daves job to estimate the profitability of the project so ESP can submit its proposal to Metropolis.
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