Scribd
Upload
80 views6 pages

Dhahran Simplified Starter

1. The document presents the inputs, calculations, and net present value (NPV) analysis of a road construction contract valued at 168 million SAR over 5 years from 1993-1997. 2. Key inputs included a 15% advance on the contract, billing schedule, equipment costs of 38 million SAR, and hurdle rates ranging from 0-50%. 3. The NPV of the contract was calculated under different hurdle rates, with a positive NPV achieved at rates up to 20%.

Uploaded by

Abdullah Ahmed
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
80 views6 pages

Dhahran Simplified Starter

1. The document presents the inputs, calculations, and net present value (NPV) analysis of a road construction contract valued at 168 million SAR over 5 years from 1993-1997. 2. Key inputs included a 15% advance on the contract, billing schedule, equipment costs of 38 million SAR, and hurdle rates ranging from 0-50%. 3. The NPV of the contract was calculated under different hurdle rates, with a positive NPV achieved at rates up to 20%.

Uploaded by

Abdullah Ahmed
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
You are on page 1/ 6

Dhahran Roads (A): Simplified

Negotiable Inputs

Parameters

Start_Date
Advance on Contract
Billing Schedule

1/1/1993
15%
SAR millions
1993
11
1994
36
1995
45
1996
43
1997
33

Intermediate Calculations
Percent_BillPaid
total value_contact
Remainder_Equipmet

outcomes

85%
168 million
25%

1
2
3
4
5

salvage_equipment
Cost_Equipment
Advance_Equipment
Hurdle_Rate
Cost Schedule
1993
1994
1995
1996
1997

0
38 SAR millions
75%
18%
SAR millions
difference
7
11
25
36
29
45
27
43
20
33

28.5

9.322034
25.85464
27.38839
22.17892
14.4246
99.16859

NPV Calcualtions

Year

1993

1994

1995

$9.35

$30.60

$9.35

$30.60

Cash Inflow
Advance
bill receipt
salvage value of equipment
total

25.2

$25.20

Cash Outflows
Equipment cost

($28.50)

costs
total

($28.50)

($9.50)
($7.00)
($16.50)

Net cash flow

($3.30)

($7.15)

$5.60

present Value

($3.30)

($6.06)

$4.02

NPV

$8.74

($25.00)
($25.00)

1996

1997

1998

$38.25

$28.05

$38.25

$36.55
0
$36.55

($29.00)
($29.00)

($27.00)
($27.00)

($20.00)
($20.00)

$28.05

$9.25

$9.55

$8.05

$5.63

$4.93

$3.52

Hurdle_Rate
NPV
0% $22.00
5% $17.12
10% $13.30
15% $10.26
20% $7.82
25% $5.85
30% $4.24
35% $2.91
40% $1.80
45% $0.88
50% $0.11

NPV
$25.11

$20.11

$15.11
NPV
$10.11

$5.11

$0.11
0%

5%

10%

15%

20%

Hurdl

NPV

10%

15%

20%

25%

Hurdle_Rate

30%

35%

40%

45%

50%

You might also like