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Pipeline Model Spreadsheet

Pipeline Model Spreadsheet

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Published by BronteCapital
A two page model of returns on a regulated gas pipeline. The first page deals with a simple two period model. The second with a (more realistic) 50 period model.
A two page model of returns on a regulated gas pipeline. The first page deals with a simple two period model. The second with a (more realistic) 50 period model.

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Published by: BronteCapital on Dec 10, 2009
Copyright:Attribution Non-commercial

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02/27/2013

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Simple model - pipeline - lifespan 2 periods - payment at the end of each period
Assumed rate of return12%2$100Annual required return$59.17
Discount factor 
10.89$52.8320.8$47.17Total discounted return$100.00 (note that this is a check!)Starting $50.00Ending $-Average $25.00Recorded profit$9.17Return on average equity36.7%Number of periods(payment at the end of each period)Assumed cost buildingpipeline(note we chose this -so that thediscounted return equals the costof the pipeline
PaymenttimeDiscountedreturnCapital employed -second year 
 
Return12%Capital cost100Annual return12.04Note the 35th year - and its ROE is highlighted in yellowdiscount factorannual returndiscounted returnequity Profit10.8912.0410.7598 10.0420.812.049.6096 10.0430.7112.048.5794 10.0440.6412.047.6592 10.0450.5712.046.8390 10.0460.5112.046.1088 10.0470.4512.045.4586 10.0480.412.044.8684 10.0490.3612.044.3482 10.04100.3212.043.8880 10.04110.2912.043.4678 10.04120.2612.043.0976 10.04130.2312.042.7674 10.04140.212.042.4672 10.04150.1812.042.2070 10.04160.1612.041.9668 10.04170.1512.041.7566 10.04180.1312.041.5764 10.04190.1212.041.4062 10.04200.112.041.2560 10.04210.0912.041.1158 10.04220.0812.041.0056 10.04230.0712.040.8954 10.04240.0712.040.7952 10.04250.0612.040.7150 10.04260.0512.040.6348 10.04270.0512.040.5646 10.04280.0412.040.5044 10.04290.0412.040.4542 10.04300.0312.040.4040 10.04310.0312.040.3638 10.04320.0312.040.3236 10.04330.0212.040.2934 10.04340.0212.040.2632 10.04350.0212.040.2330 10.04360.0212.040.2028 10.04370.0212.040.1826 10.04380.0112.040.1624 10.04390.0112.040.1422 10.04400.0112.040.1320 10.04410.0112.040.1218 10.04420.0112.040.1016 10.04430.0112.040.0914 10.04
 
440.0112.040.0812 10.04450.0112.040.0710 10.04460.0112.040.078 10.0447012.040.066 10.0448012.040.054 10.0449012.040.052 10.0450012.040.040 10.04
100sum discountedreturn

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