Bond Street Partners (client) are keen to invest in a road project called Chelsea Highway in the
Question:
Bond Street Partners (client) are keen to invest in a road project called Chelsea Highway in the Isle of Oxford. The client is responsible for all the capex, opex and other costs. They will have the right to collect the toll from the traffic. They have provided the mandate to conduct the financial feasibility of the project to Wigmore Advisors - a boutique corporate finance advisory firm.
You are the financial modeller with Wigmore Advisors, and are responsible for preparing an excel based financial model with annual granularity to evaluate the financial feasibility of the project.
Financial Modelling Exercise
1 Develop a financial model to evaluate the financial feasibility of the Chelsea Highway Project including each of the following for the entire Project:
1a Cash Flow Waterfall
1b Sources and Uses of Cash
1c Income Statement
1d Balance Sheet
2 Calculate the following at Project Level:
2a Pre-tax NPV
2b Post-tax NPV
2c Pre-tax IRR
2d Post-tax IRR
3 Calculate the following at Equity Level:
3a Post-tax NPV
3b Post-tax IRR
4 Calculate the following Debt Ratios:
4a DSCR
4b LLCR
4c PLCR
5 Please provide results for post-tax NPV and post-tax IRR at Project Level for the following sensitivity / scenario analyses:
5a Increase Pre-operating Capital Expenditure by 10
5b Increase Operating Expenditure by 10%
5c Decrease Traffic by 5%
5d Decrease Toll Rate by 5%
5e Increase Pre-operating Capital Expenditure and Operating Expenditure by 10%, decrease Traffic and Toll Rate by 5%
Managerial economics applications strategy and tactics
ISBN: 978-1439079232
12th Edition
Authors: James r. mcguigan, R. Charles Moyer, frederick h. deb harris