There are no equations on the spreadsheets.. these are the totals given to us using the Urban Water Project. I just need Year 3

ceted costs Per Iwasaki's observations, water vendors averaged 150 to 350 customers per day. The physicians on the team concluded that each customer needed a minimum of one liter of clean water per day for his or her household. The team planned to have 50 filters operating by the end of its first year of operations, an additional 1,950 filters at the end of year two, and a further 1,000 filters by the end of the third year. Each vendor would have one filter, so the network of vendors was expected to eventually grow to 3,000. After much market research, the company decided to introduce its product, purified water, at a price of US$0.08 per liter. At this price, once all 3,000 slowsand filters were M operational, the projected steady-state unit sale of clean water, assuming 150 customers, was 450,000 liters per day, or about 12% of the clean water market in Dar es Salaam. Capital costs The major capital costs for the company were the slowsand filters. By using the expertise of water treatment specialists from Blue Future and UWP's own experience during year one, the team predicted that UWP would be able to manufacture filters locally beginning in year two for approximately $250 per filter; filters in year one would have to be imported $400 per filter. In addition, the team expected to incur capital costs associated with purchasing the motorcycles and trucks needed to ferry technicians and equipment to the various filter locations. The team planned on purchasing three, 97, and 50 motorcycles, respectively, in years one through three. The cost of each motorcycle was estimated at $2,500. Flatbed trucks were necessary for the distribution of filters and filter servicing equipment. UWP would need to buy one truck in year one, 20 trucks in year two, and nine additional trucks in year three at the price of $12.500 per truck. Table A shows budgeted capital costs. Table A Capital Costs, Years One to Three Year 1 2 3 Total Capital Investment Slowsand filters Number installed Cost of each filter Total expenditure 13,000 50 $400 $20,000 1,950 $250 $487,500 1,000 $250 $250,000 $757,500 Motorcycles for technicians Number Cost per motorcycle Total expenditure Flatbed trucks Number Cost per truck Total expenditure 3 $2,500 $7.500 150 97 $2,500 $242.500 50 $2.500 $ 125,000 $375,000 1 $12.500 $12,500 30 20 $12.500 $250 000 9 $12.500 $112.500 $375,000 Grand total expenditures $40,000 $980,000 $487,500 $1,507,500 and three. The budget also called for weekly testing of each filter at an expense of $2 per filter per week. The estimated annual cost of testing for year one was $5,200, and it was expected to grow to $208,000 and $312,000 by years two and three as more filters were installed. In addition, the team projected a $100 maintenance fee per filter per year, which included replacing the sand in the filter. The annual costs of maintenance for years one, two, and three were estimated at $5,000, $200,000, and $300,000, respectively. Marketing expenditures were planned to include advertising, logo stickers, and consumer education. Marketing costs would amount to $10,000, $25,000, and $40,000, respectively, for the first three years. In addition, the company planned on retaining a local celebrity to serve as a brand ambassador. Such an ambassador would be necessary to build local trust in the UWP filtration process. UWP would engage the brand ambassador on a three-year contract, entitling her to receive payments of $100,000 for years one and two and one percent of annual revenues in year three. There were also costs associated with operating the company's fleet of motorcycles and trucks. Vehicle operating expenses were expected to be $2,500, $65,000, and $110.000, respectively, for the first three years. Other costs There was considerable anxiety among the team about experiences that other entrepreneurs in Tanzania had shared about the "informal cost of doing business" in Dar es Salaam. According to Transparency International, in 2009 Tanzania was the 126th most corrupt country in the world of a total of 180 countries surveyed.18 The team knew that for UWP to achieve a timely launch of its operations, the company might need to engage with local politicians and other officials. As undesirable as this practice was, the team was struggling with how to balance political realities with its social mission of bringing clean water to the residents of Dar es Salaam. An entrepreneur with experience in Tanzania elaborated: In the city there are political blocs, and each bloc has a leader who can help with access to the right people and make important connections. Unfortunately, one has to make a small contribution to engage them. The police also are apt to pull people over without just cause, and, to be honest, one has to give them a few dollars to be free to go. One never knows what these informal costs will be. But one needs to make an estimate and factor that into budgets. On average, one should figure on these costs being as high as 10% to 20% of a business's revenues. Incentive Structure for Water Vendors A key challenge for the team was how to motivate monitor and compensate its network of water vendors. The water vendors were at the heart of the company they would be responsible for selling the product and collecting the revenues. They were also the first line of defense on quality control The team considered several possible incentive contracts with the water vendors, including leasing the use of filters for a flat fee and a profit sharing agreement. After much deliberating the team