Question:
TBD=42
Scenario Details The "Automated Parcel Delivery" company is examining a proposal to provide a drone parcel delivery service for supermarkets across the Perth Metropolitan area. It will operate the drones from 14 supermarkets and 1 warehouse location across Perth. To do this, the 14 supermarkets and 1 warehouse need to have customised loading, take-off and landing zones built. These will be built by the "Automated Parcel Delivery" company. The company will use 25 drones spread across the 15 locations to carry out the deliveries. A network of solar panels will be installed at the 15 locations for charging the drones. This will minimise the use of the main electricity grid powering the systems. A solar rebate will be offered by the WA government to the "Automated Parcel Delivery" company to encourage the use of renewable energy. The delivery drones can carry up to 5 deliveries. The normal delivery window, using trucks, is a 2-hour timeframe. With using the drones, the delivery window will be reduced to a 15-minute window. For Western Australia, and to start with, Perth, this will be a significant infrastructure project. If the trial is successful, the "Automated Parcel Delivery" company would be looking to expand their service network to other capital cities in Australia with an outlook to expand globally. It is proposed that the delivery drones' trail would be run as a fully costed, stand-alone project and a self-sustaining business venture. The project assumes that all approvals have been given by the Civil Aviation Safety Authority (CASA) to allow the delivery drones to operate. Congratulations, the "Automated Parcel Delivery" company has employed you as an engineering consultant and assigned you the task to work with the "Automated Parcel Delivery" company planning design team on the proposed new loading, take-off, and landing zones. The total construction cost of the project is estimated to be $22.5 million in today's dollars. In addition to the construction costs, 25 new delivery drones will be purchased at a cost of $23,500 each. The drones will be purchased on the same day as the completion of construction so that they can immediately start earning revenue. Use these figures to determine the total amount you will be required to borrow to finance the project. These figures include the complete construction costs associated with the customised loading, take-off, and landing zones. Revenue will be generated via delivery fees and the solar panel rebate and from the electronic advertising to be placed at the customised loading, take-off, and landing platforms. The total expected revenue from advertising is estimated to be $150k per year. The order delivery charge will be calculated using the figure of $N per delivery, depending on the order value, as shown in Table 1. Table 1 Order values, delivery charge and expected number of orders per week. Order Value Up to $49.99 $50 - $99.99 Delivery Charge $N $ $ Expected Weekly Orders 3500 4500 $100 - $199.99 7500 $200 or more 12500 Financing Structure of the Project To finance the project the "Automated Parcel Delivery" company intends borrowing the total amount of money with an annual interest rate of 2.02%. The borrowed funds will help cover the cost of the preparation of all the documentation, contracts, public consultation, the tendering process, the actual construction, and commissioning. It is possible that during the early stages of the completed project some of the borrowed funds will in part cover, staff wages and the ongoing operation and maintenance costs. The proposed financing arrangement for the loan is to be financed over a 15-year period. The "Automated Parcel Delivery" company has stipulated that if the project was to go ahead, the initial project scoping must start on the 1st of Jul 2022 and has stated that the project is to break even at the end of the 15th financial year. This goal is to be achieved from revenue generated via delivery charges, solar power rebates and from the advertising while also considering the expected annual ongoing power supply tariff, maintenance, and operational costs. The "Automated Parcel Delivery" company requires that the delivery charge ($N) must be set at a competitive value. This is deemed that the for the lowest order value of $N, it must be no greater than $20. A second constraint stipulates that the project must break even in less than or equal to 15 years. The loan draw-down profile of the $22.5m borrowed funds follows the typical project life cycle "S curve" expenditure distribution is given in Table 2 below. Note also that the additional cost of the 25 delivery drones is to be treated as a separate loan in addition to the $22.5m and will begin at project handover. Table 2 Expected loan draw down amounts for each year. Year of the $22.5m Loan Drawdown By the end of 1st Year By the end of 2nd Year By the end of 3rd Year By the end of 4th Year By the end of 5th Year Expected Loan Drawdown Profile Expected drawdown is 10% of total loan amount. Expected drawdown is 35% of total loan amount. Expected drawdown is 35% of total loan amount. Expected drawdown is 15% of total loan amount. Expected drawdown is 5% of total loan amount. . . Note that all the three revenue streams can only start once ALL customised loading, take-off, and landing zones are commissioned and handed over. For simplicity assume all costs and revenues land at the end of each Australian financial year (June 30). When calculating the NPV, the same interest rate is to be used as your discount rate for all inflows and outflows. Operations and Maintenance (O&M) Costs The expected costs associated with the ongoing maintenance and operational cost (in today's dollars) is estimated to be $3.6m per year. These costs include the annual CASA Licensing fee. Note that the annual Operational and Maintenance costs commence only once all the construction of the 15 customised loading, take-off, and landing zones are built, commissioned, and handed over. Also assume that the operation and maintenance costs remain the same each year and that all costs land at the end of each financial year. Power Supply and Usage costs. It is estimated that $2.4m will be the annual power cost tariff that the "Automated Parcel Delivery" company will have to pay. The "Automated Parcel Delivery" company intends to recover $350k /year of the total $2.4m/year power cost tariff via the proposed solar panel array network which will be installed as part of this project and forms part of the $22.5m construction cost mentioned above. Note: The annual $350k solar rebate only comes into effect exactly 2 years after the construction of the project has been completed and handed over. Appendix Information In the appendices you have been given tables of the work break down structures covering the expected Electrical, Mechanical and the Communications / IT engineering scope of works. You have also been given a table of the Master Plan for the project. Refer to Table 4. B 8 Appendix 1 The Master Plan - Drone Parcel Delivery Activity Description Predecessors Weeks* A Prepare concept plan broad scope of the project Start 1/7/22 35 B Seek Public Consultation and stakeholder A 25 engagement Prepare Business Case and Obtain Environmental 16 Approvals D Commence and close the Tender Period E Analyse and award contract to the winning D 6 tenderer F Finalise and submit the detailed design of the E 17 Civil, Electrical, Mechanical and the Comms IT engineering works and wait for final approvals from CASA (Civil Aviation Safety Authority) Ordering of all materials required for the Civil, F Electrical, Mechanical and the Comms IT engineering works H Ordering of the 25 delivery drones G 7 Completion of the Construction Phase - for all the H 22 Civil scope of works J Completion of the Construction Phase - for all TBD Electrical, Mechanical and the Comms IT engineering scope of works Final Commissioning and Project Handover of the J total project and commemorate with the Premier at a ribbon cutting ceremony Table 3 The master plan of the project. 12 18 TBD - To be determined from the WBS tables 4, 5 & 6. Appendix 2 Superior Contractors Pty. Ltd. - Income Statement ($ AUD x 1000) Fiscal Year ending 30-Jun-20 30-Jun-19 Net Revenue $ 35,100.00 $ 30,350.00 Cost of Goods Sold $ 28,200.00 $ 25,426.00 Gross Margin $ 6,900.00 $ 4,924.00 Other Income Investment A $ 41.00 Investment B $ 54.00 Investment C $ 53.00 Total Income from Investments $ 148.00 $ $ $ $ 30.00 48.00 19.00 97.00 Operating Expenses Selling, General & Admin $ 2,851.00 R&D and Engineering $ 210.00 Special Charges $ 9.00 Total Operating Expenses $ 3,070.00 $ 2,451.00 $ 292.00 $ 45.00 $ 2,788.00 EBITDA Depreciation and Amortisation | EBIT $ 3,830.00 $ 352.00 $ 3,478.00 $ 2,136.00 $ 235.00 $ 1,901.00 Interest $ 85.00 Provision for Income Tax $ 653.00 Net Profit / Income $ 2,888.00 $ 98.00 $ 545.00 $ 1,355.00 Superior Contractors Pty. Ltd. - Cash Flow Statement ($ AUD X 1000) Fiscal Year ending 30-Jun-20 30-Jun-19 Cash flow from Operating Activities Net Income Depreciation and Amortisation Changes in Working Capital Changes in Non-Current Assets & Liabilities Special charges and other adjustments Net cash provided by Operating Activities $ 2,888.00 $ 352.00 $ 850.00 $ 108.00 $ (88.00) $ 4,110.00 $ 1,355.00 $ 235.00 $ 893.00 $ 87.00 $ 635.00 $ 3,205.00 Cash flow from Investing Activities Marketable Securities Purchases Sales Capital Expenditure Net Cash Used in Investing Activities $ (3,950.00) $ 3,642.00 $ (154.00) $ (462.00) $ (4,602.00) $ 2,956.00 $ (152.00) $ (1,798.00) Cash flow from Financing Activities Purchase of Common Stock Issuance of Common Stock to Staff Net Cash Used in Investing Activities $(1,130.00) $ 235.00 $ (895.00) $(1,934.00) $ 260.00 $ (1,674.00) Effect of exchange rate changes in cash Net Increase in Cash $ (120.00) $ 2,633.00 $ 60.00 $ (207.00) Cash at the beginning of the period $ 1,135.00 $ 1,342.00 Cash at the end of the period $ 3,768.00 $ 1,135.00 Superior Contractors Pty. Ltd. - Balance Sheet ($ AUD X 1000) Fiscal Year ending 30-Jun-20 30-Jun-19 Current Assets Cash (at end of period) $ 3,768.00 $ 1,135.00 Short Term Investments $ 205.00 $ 154.00 Accounts Receivable $ 1,208.00 $ 987.00 Inventories $ 139.00 $ 127.00 Other $ 10.00 $ 600.00 Total Current Assets $ 5,330.00 $ 3,003.00 Non - Current Assets Property, Plant & Equipment Long Term Investments Other Total Non-Current Assets $ 850.00 $ 3,209.00 $ 148.00 $ 4,207.00 $ 980.00 $ 2,897.00 $ 256.00 $ 4,133.00 Total Assets $ 9,537.00 $ 7,136.00 Current Liabilities Accounts Payable Accrued and other Total Current Liabilities $ 1,500.00 $ 2,500.00 $ 4,000.00 $ 1,807.00 $ 1,306.00 $ 3,113.00 Non - Current Liabilities Long Term Debt $ 1,131.00 $ 989.00 Total Non-Current Liabilities $ 1,131.00 $ 989.00 Total Liabilities $ 5,131.00 $ 4,102.00 Equity Preferred stock Common Stock and Capital Retained Earning Total Equity $ 967.00 $ 1,917.00 $ 1,522.00 $ 4,406.00 $ 885.00 $ 1,349.00 $ 800.00 $ 3,034.00 O'Deliver Star Contract Pty Ltd. Income Statement ($ AUD x 1000) Fiscal Year ending 30-Jun-20 30-Jun-19 Net Revenue $ 34,564.00 $ 29,845.00 Cost of Good Sold $ 29,105.00 $ 24,538.00 Gross Margin $ 5,459.00 $ 5,307.00 Other Income Investment A $ Investment B $ Investment $ Total Income from Investments $ 20.00 41.00 31.00 64.00 23.00 118.00 $ $ $ $ 16.00 77.00 Operating Expenses Selling, General & Admin $ 2,894.00 R&D and Engineering $ 425.00 Special Charges $ 7.00 Total Operating Expenses $ 3,326.00 $ 2,500.00 $ 419.00 $ 3.00 $ 2,922.00 EBITDA Depreciation and Amortisation EBIT $ 2,133.00 $ 198.00 $ 1,935.00 $ 2,385.00 $ 480.00 $ 1,905.00 Interest $ 39.00 Provision for Income Tax $ 975.00 Net Profit / Income $ 1,039.00 $ 45.00 $ 502.00 $ 1,435.00 O'Deliver Star Contract Pty Ltd. Cash Flow Statement ($ AUD x 1000) Fiscal Year ending 30-Jun-20 30-Jun-19 Cash flow from Operating Activities Net Income Depreciation and Amortisation Changes in Working Capital Changes in Non-Current Assets & Liabilities Special charges and other adjustments Net cash provided by Operating Activities $ 1,039.00 $ 198.00 $ 901.00 $ 108.00 $ (98.00) $ 2,148.00 $ 1,435.00 $ 480.00 $ 893.00 $ 87.00 $ 635.00 $ 3,530.00 Cash flow from Investing Activities Marketable Securities Purchases Sales Capital Expenditure Net Cash Used in Investing Activities $ (4,006.00) $ 3,642.00 $ (154.00) $ (518.00) $ (4,736.00) $ 2,956.00 $ (152.00) $ (1,932.00) Cash flow from Financing Activities Purchase of Common Stock Issuance of Common Stock to Staff Net Cash Used in Investing Activities $ (1,135.00) $ 245.00 $ (890.00) $ (1,935.00) $ 265.00 $ (1,670.00) Effect of exchange rate changes in cash Net Increase in Cash $ (120.00) $ 620.00 $ 60.00 $ (12.00) Cash at the beginning of the period $ 1,330.00 $ 1,342.00 Cash at the end of the period $ 1,950.00 $ 1,330.00 O'Deliver Star Contract Pty Ltd. Balance Sheet ($ AUD x 1000) Fiscal Year ending 30-Jun-20 30-Jun-19 Current Assets Cash (at end of period) $ 1,950.00 $ 1,330.00 Short Term Investments $ 205.00 $ 154.00 Accounts Receivable $ 1,208.00 $ 987.00 Inventories $ 142.00 $ 131.00 Other $ $ 600.00 Total Current Assets $ 3,505.00 $ 3,202.00 Non - Current Assets Property, Plant & Equipment Long Term Investments Other Total Non-Current Assets $ 850.00 $ 3,209.00 $ 148.00 $ 4,207.00 $ 980.00 $ 2,897.00 $ 256.00 $ 4,133.00 Total Assets $ 7,712.00 $ 7,335.00 Current Liabilities Accounts Payable Accrued and other Total Current Liabilities $ 2,089.00 $ 1,456.00 $ 3,545.00 $ 2,000.00 $ 1,400.00 $ 3,400.00 Non - Current Liabilities Long Term Debt $ 1,250.00 $ 1,000.00 Total Non-Current Liabilities $ 1,250.00 $ 1,000.00 $ 4,795.00 $ 4,400.00 Total Liabilities Equity Preferred stock Common Stock and Capital Retained Earning Total Equity $ 452.00 $ 969.00 $ 1,496.00 $ 2,917.00 $ 806.00 $ 1,253.00 $ 876.00 $ 2,935.00 2. Draw an AOA diagram for the of the Electrical Engineering scope of works, starting from and including activity "AE" up to and including activity "UE. Refer to Table 6 IE2 EE 2 FE.3 JE2.0 JE2 BE2 KE 3 UE1.0 SE3 1166 AE 2 CE 3 GE1.0 GE 3 UE6 13.0EB VIS PE31 RES. PE10 GE2.0 LE4 TE.4 UE2,0 DE 3 NE.8 HE.4 ME6 90 Figure 1: AOA diagram of the Electrical Engineering scope of works a. Find and state the critical path and determine its duration in weeks The critical path is (1 AE - DEHELE-OE PERE TE UE). Its duration is 160+2+3+4+4+8+3+8+4+6 = 202 (weeks). b. State by how many weeks equipping the switch room with the main switchboard and protection fuses and circuit breakers at the docking stations can be delayed by, without affecting the completion time of the Electrical Engineering component of the project The equipping the switch room with the main switchboard and protection fuses and circuit breakers at the docking stations (HE) cannot be delayed without affecting the completion time of the Electrical Engineering component of the project be cause it's on the critical path. c. State by how many weeks can the Installation of the interruptible power supply equipment in the main switch room(s) can be delayed by, without affecting the completion time of the Electrical Engineering component of the project. Up to 11 weeks (critical path - [S, 2,3,4,7,11,12,15,16,17,19,20,F]) d. State by how many weeks the Termination of the diverse 66kV cable from Western Power for power robustness and reliability at the Kewdale docking station can be delayed by, without affecting the completion time of the Electrical Engineering component of the project. Up to 5 weeks ( critical path - [S, 2,3,5,9,13,15,16,17,19,20,F1) e. Similarly, by how many weeks could the installation of the lightning and surge protection at all docking stations be delayed by, without affecting the completion time of the Electrical Engineering component of the project Up to 9 weeks critical path - [S, 2,3,6,10,14,17,19,20,F1) WBS Mechanical Engineering Scope of Works Select a period to highlight at right A legend describing the charting follows. Actual Duration ACTIVITY DESCRIPTION ACTUAL START ACTUAL DURATION PERIODS (Weeks) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 AM Confirm order all materials from the design bill of quantities 1 2 BM Catalogue and deliver all materials to appropriate sites 3 2 Mobilise personnel to site office(s) CM 5 2 DM Install the landing pads and pressure sensors to specifications 7 3 EM Install fire sprinkler systems at loading, takeoff, and landing zones. 7 3 FM Install air conditioning and control systems 7 4 Install all control and signalling equipment GM 7 5 HM Take delivery and test all 25 delivery drones 11 4 IM Install the required control equipment for the solar panel tracking mechanism 10 4 JM Ensure all sensor data is being received back at the control room 12 12 Work with CASA to limit the drone rotor blade speed for noise KM 24 4 LM Test the drones under rotor failure and write up emergency procedure guidelines 28 4 MM Final testing commissioning and formal handover 32 4 Total Time Duration 35 Weeks WBS Communications and IT Engineering Scope of Works Select a period to highlight at right. A legend describing the charting follows. Actual Duration ACTIVITY DESCRIPTION ACTUAL START ACTUAL DURATION PERIODS (Weeks) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 Confirm order all materials from the design bill of quantities AT 1 2 BT Catalogue and deliver all materials to appropriate sites 3 2 Mobilise personnel to site office(s) CT 5 2 Install all security cameras, CCTV, routers, and IT requirements along the route and at the docking stations. DT 7 10 Install the optic fibre cables and connect to the Telecommunications network as per the design ET 7 14 Install the router system enabling wireless internet access and continuous GPS access. FT 7 7 Installation of mobile towers and antennas as required GT 17 5 Install GSM5 mobile equipment racks at existing Telstra exchanges and the mobile towers HT 14 6 Setup the backup comms network for the pilot to communicate back to the main control room IT 21 3 Install the security microphone and speaker system at the loading, take-off and landing zones with comms back to the control room JT 20 5 Install the remotely controlled security cameras with live feed back to the control room. KT 25 6 Final testing commissioning and formal handover LT 31 5 Total Time Duration 35 Weeks ACTIVITY DESCRIPTION ACTUAL START ACTUAL DURATION PERIODS (Weeks) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 AE Confirm order all materials from the design bill of quantities and deliver all materials to sitequantities and deliver all materials to site 1 2 BE Prepare final as built drawings and documentation 3 2 Mobilise personnel to site office(s) CE 3 3 DE Relocate existing electrical infrastructure as required by the design 3 3 EE Upgrade a 66kV substation at the Kewdale warehouse 5 2 Install all the solar array panels at the designated locations FE 5 3 GE Terminate the diverse 66kV cable from Western Power for power robustness and reliability at Kewdale warehouse. . 6 3 HE Equip the switch room with the main switchboard and protection fuses and circuit breakers at the loading, take-off, and landing zones. 6 4 Install all sub switchboards at the loading, take-off, and landing zones IE 7 2 JE Install the interruptible power supply equipment in the main switch room(s) 9 2 KE Install all the wiring reticulation along the route for supply to the signalling controls 8 3 LE Install the protection equipment at the local sub stations 10 4 ME Install all LED lighting around the landing pads including the security lighting 10 6 NE Install lightning and surge protection at all loading, take-off, and landing zones 16 8 8 OE Test primary and secondary power supply. 14 8 PE Test that all lighting and security lighting meets the Australian Standards and CASA requirements 22 3 RE Final testing of the uninterruptable power supply. 25 8 SE Install all landing pad lights as per CASA requirements 33 3 TE Test that all lighting and security lighting meets the Australian Standards and CASA requirements 33 4 UE Final testing commissioning and formal handover 37 6 Total Time Duration 42 Weeks 4. Using the now completed Table 3 determine the overall expected project completion time from the initial tender, "Activity A" to the commissioning and handover of the complete project, "Activity K" [8 Marks). a. Clearly state how many weeks in total it will take to build and commission the five docking stations. This is a critical number as it will determine when the project can commence earning revenue [2 marks]. b. Show the derivation of the total annual revenue equation in terms of $N that is expected during the 8th year of operation [6 Marks). 7. Alternative Scenario: How many additional delivery drones can be purchased if the negotiated interest rate in this alternative scenario is 1.89% and the delivery price of $N is fixed at $20, given that you are still required to break even at the end of the 15-year time frame. (Show your working and equations used*) (20 Marks]. Scenario Details The "Automated Parcel Delivery" company is examining a proposal to provide a drone parcel delivery service for supermarkets across the Perth Metropolitan area. It will operate the drones from 14 supermarkets and 1 warehouse location across Perth. To do this, the 14 supermarkets and 1 warehouse need to have customised loading, take-off and landing zones built. These will be built by the "Automated Parcel Delivery" company. The company will use 25 drones spread across the 15 locations to carry out the deliveries. A network of solar panels will be installed at the 15 locations for charging the drones. This will minimise the use of the main electricity grid powering the systems. A solar rebate will be offered by the WA government to the "Automated Parcel Delivery" company to encourage the use of renewable energy. The delivery drones can carry up to 5 deliveries. The normal delivery window, using trucks, is a 2-hour timeframe. With using the drones, the delivery window will be reduced to a 15-minute window. For Western Australia, and to start with, Perth, this will be a significant infrastructure project. If the trial is successful, the "Automated Parcel Delivery" company would be looking to expand their service network to other capital cities in Australia with an outlook to expand globally. It is proposed that the delivery drones' trail would be run as a fully costed, stand-alone project and a self-sustaining business venture. The project assumes that all approvals have been given by the Civil Aviation Safety Authority (CASA) to allow the delivery drones to operate. Congratulations, the "Automated Parcel Delivery" company has employed you as an engineering consultant and assigned you the task to work with the "Automated Parcel Delivery" company planning design team on the proposed new loading, take-off, and landing zones. The total construction cost of the project is estimated to be $22.5 million in today's dollars. In addition to the construction costs, 25 new delivery drones will be purchased at a cost of $23,500 each. The drones will be purchased on the same day as the completion of construction so that they can immediately start earning revenue. Use these figures to determine the total amount you will be required to borrow to finance the project. These figures include the complete construction costs associated with the customised loading, take-off, and landing zones. Revenue will be generated via delivery fees and the solar panel rebate and from the electronic advertising to be placed at the customised loading, take-off, and landing platforms. The total expected revenue from advertising is estimated to be $150k per year. The order delivery charge will be calculated using the figure of $N per delivery, depending on the order value, as shown in Table 1. Table 1 Order values, delivery charge and expected number of orders per week. Order Value Up to $49.99 $50 - $99.99 Delivery Charge $N $ $ Expected Weekly Orders 3500 4500 $100 - $199.99 7500 $200 or more 12500 Financing Structure of the Project To finance the project the "Automated Parcel Delivery" company intends borrowing the total amount of money with an annual interest rate of 2.02%. The borrowed funds will help cover the cost of the preparation of all the documentation, contracts, public consultation, the tendering process, the actual construction, and commissioning. It is possible that during the early stages of the completed project some of the borrowed funds will in part cover, staff wages and the ongoing operation and maintenance costs. The proposed financing arrangement for the loan is to be financed over a 15-year period. The "Automated Parcel Delivery" company has stipulated that if the project was to go ahead, the initial project scoping must start on the 1st of Jul 2022 and has stated that the project is to break even at the end of the 15th financial year. This goal is to be achieved from revenue generated via delivery charges, solar power rebates and from the advertising while also considering the expected annual ongoing power supply tariff, maintenance, and operational costs. The "Automated Parcel Delivery" company requires that the delivery charge ($N) must be set at a competitive value. This is deemed that the for the lowest order value of $N, it must be no greater than $20. A second constraint stipulates that the project must break even in less than or equal to 15 years. The loan draw-down profile of the $22.5m borrowed funds follows the typical project life cycle "S curve" expenditure distribution is given in Table 2 below. Note also that the additional cost of the 25 delivery drones is to be treated as a separate loan in addition to the $22.5m and will begin at project handover. Table 2 Expected loan draw down amounts for each year. Year of the $22.5m Loan Drawdown By the end of 1st Year By the end of 2nd Year By the end of 3rd Year By the end of 4th Year By the end of 5th Year Expected Loan Drawdown Profile Expected drawdown is 10% of total loan amount. Expected drawdown is 35% of total loan amount. Expected drawdown is 35% of total loan amount. Expected drawdown is 15% of total loan amount. Expected drawdown is 5% of total loan amount. . . Note that all the three revenue streams can only start once ALL customised loading, take-off, and landing zones are commissioned and handed over. For simplicity assume all costs and revenues land at the end of each Australian financial year (June 30). When calculating the NPV, the same interest rate is to be used as your discount rate for all inflows and outflows. Operations and Maintenance (O&M) Costs The expected costs associated with the ongoing maintenance and operational cost (in today's dollars) is estimated to be $3.6m per year. These costs include the annual CASA Licensing fee. Note that the annual Operational and Maintenance costs commence only once all the construction of the 15 customised loading, take-off, and landing zones are built, commissioned, and handed over. Also assume that the operation and maintenance costs remain the same each year and that all costs land at the end of each financial year. Power Supply and Usage costs. It is estimated that $2.4m will be the annual power cost tariff that the "Automated Parcel Delivery" company will have to pay. The "Automated Parcel Delivery" company intends to recover $350k /year of the total $2.4m/year power cost tariff via the proposed solar panel array network which will be installed as part of this project and forms part of the $22.5m construction cost mentioned above. Note: The annual $350k solar rebate only comes into effect exactly 2 years after the construction of the project has been completed and handed over. Appendix Information In the appendices you have been given tables of the work break down structures covering the expected Electrical, Mechanical and the Communications / IT engineering scope of works. You have also been given a table of the Master Plan for the project. Refer to Table 4. B 8 Appendix 1 The Master Plan - Drone Parcel Delivery Activity Description Predecessors Weeks* A Prepare concept plan broad scope of the project Start 1/7/22 35 B Seek Public Consultation and stakeholder A 25 engagement Prepare Business Case and Obtain Environmental 16 Approvals D Commence and close the Tender Period E Analyse and award contract to the winning D 6 tenderer F Finalise and submit the detailed design of the E 17 Civil, Electrical, Mechanical and the Comms IT engineering works and wait for final approvals from CASA (Civil Aviation Safety Authority) Ordering of all materials required for the Civil, F Electrical, Mechanical and the Comms IT engineering works H Ordering of the 25 delivery drones G 7 Completion of the Construction Phase - for all the H 22 Civil scope of works J Completion of the Construction Phase - for all TBD Electrical, Mechanical and the Comms IT engineering scope of works Final Commissioning and Project Handover of the J total project and commemorate with the Premier at a ribbon cutting ceremony Table 3 The master plan of the project. 12 18 TBD - To be determined from the WBS tables 4, 5 & 6. Appendix 2 Superior Contractors Pty. Ltd. - Income Statement ($ AUD x 1000) Fiscal Year ending 30-Jun-20 30-Jun-19 Net Revenue $ 35,100.00 $ 30,350.00 Cost of Goods Sold $ 28,200.00 $ 25,426.00 Gross Margin $ 6,900.00 $ 4,924.00 Other Income Investment A $ 41.00 Investment B $ 54.00 Investment C $ 53.00 Total Income from Investments $ 148.00 $ $ $ $ 30.00 48.00 19.00 97.00 Operating Expenses Selling, General & Admin $ 2,851.00 R&D and Engineering $ 210.00 Special Charges $ 9.00 Total Operating Expenses $ 3,070.00 $ 2,451.00 $ 292.00 $ 45.00 $ 2,788.00 EBITDA Depreciation and Amortisation | EBIT $ 3,830.00 $ 352.00 $ 3,478.00 $ 2,136.00 $ 235.00 $ 1,901.00 Interest $ 85.00 Provision for Income Tax $ 653.00 Net Profit / Income $ 2,888.00 $ 98.00 $ 545.00 $ 1,355.00 Superior Contractors Pty. Ltd. - Cash Flow Statement ($ AUD X 1000) Fiscal Year ending 30-Jun-20 30-Jun-19 Cash flow from Operating Activities Net Income Depreciation and Amortisation Changes in Working Capital Changes in Non-Current Assets & Liabilities Special charges and other adjustments Net cash provided by Operating Activities $ 2,888.00 $ 352.00 $ 850.00 $ 108.00 $ (88.00) $ 4,110.00 $ 1,355.00 $ 235.00 $ 893.00 $ 87.00 $ 635.00 $ 3,205.00 Cash flow from Investing Activities Marketable Securities Purchases Sales Capital Expenditure Net Cash Used in Investing Activities $ (3,950.00) $ 3,642.00 $ (154.00) $ (462.00) $ (4,602.00) $ 2,956.00 $ (152.00) $ (1,798.00) Cash flow from Financing Activities Purchase of Common Stock Issuance of Common Stock to Staff Net Cash Used in Investing Activities $(1,130.00) $ 235.00 $ (895.00) $(1,934.00) $ 260.00 $ (1,674.00) Effect of exchange rate changes in cash Net Increase in Cash $ (120.00) $ 2,633.00 $ 60.00 $ (207.00) Cash at the beginning of the period $ 1,135.00 $ 1,342.00 Cash at the end of the period $ 3,768.00 $ 1,135.00 Superior Contractors Pty. Ltd. - Balance Sheet ($ AUD X 1000) Fiscal Year ending 30-Jun-20 30-Jun-19 Current Assets Cash (at end of period) $ 3,768.00 $ 1,135.00 Short Term Investments $ 205.00 $ 154.00 Accounts Receivable $ 1,208.00 $ 987.00 Inventories $ 139.00 $ 127.00 Other $ 10.00 $ 600.00 Total Current Assets $ 5,330.00 $ 3,003.00 Non - Current Assets Property, Plant & Equipment Long Term Investments Other Total Non-Current Assets $ 850.00 $ 3,209.00 $ 148.00 $ 4,207.00 $ 980.00 $ 2,897.00 $ 256.00 $ 4,133.00 Total Assets $ 9,537.00 $ 7,136.00 Current Liabilities Accounts Payable Accrued and other Total Current Liabilities $ 1,500.00 $ 2,500.00 $ 4,000.00 $ 1,807.00 $ 1,306.00 $ 3,113.00 Non - Current Liabilities Long Term Debt $ 1,131.00 $ 989.00 Total Non-Current Liabilities $ 1,131.00 $ 989.00 Total Liabilities $ 5,131.00 $ 4,102.00 Equity Preferred stock Common Stock and Capital Retained Earning Total Equity $ 967.00 $ 1,917.00 $ 1,522.00 $ 4,406.00 $ 885.00 $ 1,349.00 $ 800.00 $ 3,034.00 O'Deliver Star Contract Pty Ltd. Income Statement ($ AUD x 1000) Fiscal Year ending 30-Jun-20 30-Jun-19 Net Revenue $ 34,564.00 $ 29,845.00 Cost of Good Sold $ 29,105.00 $ 24,538.00 Gross Margin $ 5,459.00 $ 5,307.00 Other Income Investment A $ Investment B $ Investment $ Total Income from Investments $ 20.00 41.00 31.00 64.00 23.00 118.00 $ $ $ $ 16.00 77.00 Operating Expenses Selling, General & Admin $ 2,894.00 R&D and Engineering $ 425.00 Special Charges $ 7.00 Total Operating Expenses $ 3,326.00 $ 2,500.00 $ 419.00 $ 3.00 $ 2,922.00 EBITDA Depreciation and Amortisation EBIT $ 2,133.00 $ 198.00 $ 1,935.00 $ 2,385.00 $ 480.00 $ 1,905.00 Interest $ 39.00 Provision for Income Tax $ 975.00 Net Profit / Income $ 1,039.00 $ 45.00 $ 502.00 $ 1,435.00 O'Deliver Star Contract Pty Ltd. Cash Flow Statement ($ AUD x 1000) Fiscal Year ending 30-Jun-20 30-Jun-19 Cash flow from Operating Activities Net Income Depreciation and Amortisation Changes in Working Capital Changes in Non-Current Assets & Liabilities Special charges and other adjustments Net cash provided by Operating Activities $ 1,039.00 $ 198.00 $ 901.00 $ 108.00 $ (98.00) $ 2,148.00 $ 1,435.00 $ 480.00 $ 893.00 $ 87.00 $ 635.00 $ 3,530.00 Cash flow from Investing Activities Marketable Securities Purchases Sales Capital Expenditure Net Cash Used in Investing Activities $ (4,006.00) $ 3,642.00 $ (154.00) $ (518.00) $ (4,736.00) $ 2,956.00 $ (152.00) $ (1,932.00) Cash flow from Financing Activities Purchase of Common Stock Issuance of Common Stock to Staff Net Cash Used in Investing Activities $ (1,135.00) $ 245.00 $ (890.00) $ (1,935.00) $ 265.00 $ (1,670.00) Effect of exchange rate changes in cash Net Increase in Cash $ (120.00) $ 620.00 $ 60.00 $ (12.00) Cash at the beginning of the period $ 1,330.00 $ 1,342.00 Cash at the end of the period $ 1,950.00 $ 1,330.00 O'Deliver Star Contract Pty Ltd. Balance Sheet ($ AUD x 1000) Fiscal Year ending 30-Jun-20 30-Jun-19 Current Assets Cash (at end of period) $ 1,950.00 $ 1,330.00 Short Term Investments $ 205.00 $ 154.00 Accounts Receivable $ 1,208.00 $ 987.00 Inventories $ 142.00 $ 131.00 Other $ $ 600.00 Total Current Assets $ 3,505.00 $ 3,202.00 Non - Current Assets Property, Plant & Equipment Long Term Investments Other Total Non-Current Assets $ 850.00 $ 3,209.00 $ 148.00 $ 4,207.00 $ 980.00 $ 2,897.00 $ 256.00 $ 4,133.00 Total Assets $ 7,712.00 $ 7,335.00 Current Liabilities Accounts Payable Accrued and other Total Current Liabilities $ 2,089.00 $ 1,456.00 $ 3,545.00 $ 2,000.00 $ 1,400.00 $ 3,400.00 Non - Current Liabilities Long Term Debt $ 1,250.00 $ 1,000.00 Total Non-Current Liabilities $ 1,250.00 $ 1,000.00 $ 4,795.00 $ 4,400.00 Total Liabilities Equity Preferred stock Common Stock and Capital Retained Earning Total Equity $ 452.00 $ 969.00 $ 1,496.00 $ 2,917.00 $ 806.00 $ 1,253.00 $ 876.00 $ 2,935.00 2. Draw an AOA diagram for the of the Electrical Engineering scope of works, starting from and including activity "AE" up to and including activity "UE. Refer to Table 6 IE2 EE 2 FE.3 JE2.0 JE2 BE2 KE 3 UE1.0 SE3 1166 AE 2 CE 3 GE1.0 GE 3 UE6 13.0EB VIS PE31 RES. PE10 GE2.0 LE4 TE.4 UE2,0 DE 3 NE.8 HE.4 ME6 90 Figure 1: AOA diagram of the Electrical Engineering scope of works a. Find and state the critical path and determine its duration in weeks The critical path is (1 AE - DEHELE-OE PERE TE UE). Its duration is 160+2+3+4+4+8+3+8+4+6 = 202 (weeks). b. State by how many weeks equipping the switch room with the main switchboard and protection fuses and circuit breakers at the docking stations can be delayed by, without affecting the completion time of the Electrical Engineering component of the project The equipping the switch room with the main switchboard and protection fuses and circuit breakers at the docking stations (HE) cannot be delayed without affecting the completion time of the Electrical Engineering component of the project be cause it's on the critical path. c. State by how many weeks can the Installation of the interruptible power supply equipment in the main switch room(s) can be delayed by, without affecting the completion time of the Electrical Engineering component of the project. Up to 11 weeks (critical path - [S, 2,3,4,7,11,12,15,16,17,19,20,F]) d. State by how many weeks the Termination of the diverse 66kV cable from Western Power for power robustness and reliability at the Kewdale docking station can be delayed by, without affecting the completion time of the Electrical Engineering component of the project. Up to 5 weeks ( critical path - [S, 2,3,5,9,13,15,16,17,19,20,F1) e. Similarly, by how many weeks could the installation of the lightning and surge protection at all docking stations be delayed by, without affecting the completion time of the Electrical Engineering component of the project Up to 9 weeks critical path - [S, 2,3,6,10,14,17,19,20,F1) WBS Mechanical Engineering Scope of Works Select a period to highlight at right A legend describing the charting follows. Actual Duration ACTIVITY DESCRIPTION ACTUAL START ACTUAL DURATION PERIODS (Weeks) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 AM Confirm order all materials from the design bill of quantities 1 2 BM Catalogue and deliver all materials to appropriate sites 3 2 Mobilise personnel to site office(s) CM 5 2 DM Install the landing pads and pressure sensors to specifications 7 3 EM Install fire sprinkler systems at loading, takeoff, and landing zones. 7 3 FM Install air conditioning and control systems 7 4 Install all control and signalling equipment GM 7 5 HM Take delivery and test all 25 delivery drones 11 4 IM Install the required control equipment for the solar panel tracking mechanism 10 4 JM Ensure all sensor data is being received back at the control room 12 12 Work with CASA to limit the drone rotor blade speed for noise KM 24 4 LM Test the drones under rotor failure and write up emergency procedure guidelines 28 4 MM Final testing commissioning and formal handover 32 4 Total Time Duration 35 Weeks WBS Communications and IT Engineering Scope of Works Select a period to highlight at right. A legend describing the charting follows. Actual Duration ACTIVITY DESCRIPTION ACTUAL START ACTUAL DURATION PERIODS (Weeks) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 Confirm order all materials from the design bill of quantities AT 1 2 BT Catalogue and deliver all materials to appropriate sites 3 2 Mobilise personnel to site office(s) CT 5 2 Install all security cameras, CCTV, routers, and IT requirements along the route and at the docking stations. DT 7 10 Install the optic fibre cables and connect to the Telecommunications network as per the design ET 7 14 Install the router system enabling wireless internet access and continuous GPS access. FT 7 7 Installation of mobile towers and antennas as required GT 17 5 Install GSM5 mobile equipment racks at existing Telstra exchanges and the mobile towers HT 14 6 Setup the backup comms network for the pilot to communicate back to the main control room IT 21 3 Install the security microphone and speaker system at the loading, take-off and landing zones with comms back to the control room JT 20 5 Install the remotely controlled security cameras with live feed back to the control room. KT 25 6 Final testing commissioning and formal handover LT 31 5 Total Time Duration 35 Weeks ACTIVITY DESCRIPTION ACTUAL START ACTUAL DURATION PERIODS (Weeks) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 AE Confirm order all materials from the design bill of quantities and deliver all materials to sitequantities and deliver all materials to site 1 2 BE Prepare final as built drawings and documentation 3 2 Mobilise personnel to site office(s) CE 3 3 DE Relocate existing electrical infrastructure as required by the design 3 3 EE Upgrade a 66kV substation at the Kewdale warehouse 5 2 Install all the solar array panels at the designated locations FE 5 3 GE Terminate the diverse 66kV cable from Western Power for power robustness and reliability at Kewdale warehouse. . 6 3 HE Equip the switch room with the main switchboard and protection fuses and circuit breakers at the loading, take-off, and landing zones. 6 4 Install all sub switchboards at the loading, take-off, and landing zones IE 7 2 JE Install the interruptible power supply equipment in the main switch room(s) 9 2 KE Install all the wiring reticulation along the route for supply to the signalling controls 8 3 LE Install the protection equipment at the local sub stations 10 4 ME Install all LED lighting around the landing pads including the security lighting 10 6 NE Install lightning and surge protection at all loading, take-off, and landing zones 16 8 8 OE Test primary and secondary power supply. 14 8 PE Test that all lighting and security lighting meets the Australian Standards and CASA requirements 22 3 RE Final testing of the uninterruptable power supply. 25 8 SE Install all landing pad lights as per CASA requirements 33 3 TE Test that all lighting and security lighting meets the Australian Standards and CASA requirements 33 4 UE Final testing commissioning and formal handover 37 6 Total Time Duration 42 Weeks 4. Using the now completed Table 3 determine the overall expected project completion time from the initial tender, "Activity A" to the commissioning and handover of the complete project, "Activity K" [8 Marks). a. Clearly state how many weeks in total it will take to build and commission the five docking stations. This is a critical number as it will determine when the project can commence earning revenue [2 marks]. b. Show the derivation of the total annual revenue equation in terms of $N that is expected during the 8th year of operation [6 Marks). 7. Alternative Scenario: How many additional delivery drones can be purchased if the negotiated interest rate in this alternative scenario is 1.89% and the delivery price of $N is fixed at $20, given that you are still required to break even at the end of the 15-year time frame. (Show your working and equations used*) (20 Marks]
