ESTIMATED PROFIT

Year Project Cost Annua Cost (Note 1) Resurface Cost Total Cost 15%
1 59,624,250 1,489,000 61,113,250.00 9,166,987.50
2 34,334,500 1,489,000 35,823,500.00 5,373,525.00
3 1,489,000 1,489,000.00 223,350.00
4 1,489,000 1,489,000.00 223,350.00
5 1,489,000 1,240,000 2,729,000.00 409,350.00
6 1,489,000 1,489,000.00 223,350.00
7 1,489,000 1,489,000.00 223,350.00
8 1,489,000 1,240,000 2,729,000.00 409,350.00
9 1,489,000 1,489,000.00 223,350.00
10 1,489,000 1,489,000.00 223,350.00
11 1,489,000 1,240,000 2,729,000.00 409,350.00
12 1,489,000 1,489,000.00 223,350.00
13 1,489,000 1,489,000.00 223,350.00
14 1,489,000 1,240,000 2,729,000.00 409,350.00
15 1,489,000 1,489,000.00 223,350.00
16 1,489,000 1,489,000.00 223,350.00
17 1,489,000 1,240,000 2,729,000.00 409,350.00
18 1,489,000 1,489,000.00 223,350.00
19 1,489,000 1,489,000.00 223,350.00
20 1,489,000 1,240,000 2,729,000.00 409,350.00
21 1,489,000 1,489,000.00 223,350.00
22 1,489,000 1,489,000.00 223,350.00
23 1,489,000 1,240,000 2,729,000.00 409,350.00
24 1,489,000 1,489,000.00 223,350.00
25 1,489,000 12,000,000 13,489,000.00 2,023,350.00
26 1,489,000 1,489,000.00 223,350.00
27 1,489,000 1,489,000.00 223,350.00
28 1,489,000 1,240,000 2,729,000.00 409,350.00
29 1,489,000 1,489,000.00 223,350.00
30 1,489,000 1,489,000.00 223,350.00
93,958,750.00 44,670,000.00 21,920,000.00 160,548,750.00 24,082,312.50
ESTIMATED PROFIT ESTIMATED BID PRICE DF@15%
20% 30%
12,222,650.00 18,333,975.00 70,280,237.50 73,335,900.00 79,447,225.00 0.869565
7,164,700.00 10,747,050.00 41,197,025.00 42,988,200.00 46,570,550.00 0.756144
297,800.00 446,700.00 1,712,350.00 1,786,800.00 1,935,700.00 0.657516
297,800.00 446,700.00 1,712,350.00 1,786,800.00 1,935,700.00 0.571753
545,800.00 818,700.00 3,138,350.00 3,274,800.00 3,547,700.00 0.497177
297,800.00 446,700.00 1,712,350.00 1,786,800.00 1,935,700.00 0.432328
297,800.00 446,700.00 1,712,350.00 1,786,800.00 1,935,700.00 0.375937
545,800.00 818,700.00 3,138,350.00 3,274,800.00 3,547,700.00 0.326902
297,800.00 446,700.00 1,712,350.00 1,786,800.00 1,935,700.00 0.284262
297,800.00 446,700.00 1,712,350.00 1,786,800.00 1,935,700.00 0.247185
545,800.00 818,700.00 3,138,350.00 3,274,800.00 3,547,700.00 0.214943
297,800.00 446,700.00 1,712,350.00 1,786,800.00 1,935,700.00 0.186907
297,800.00 446,700.00 1,712,350.00 1,786,800.00 1,935,700.00 0.162528
545,800.00 818,700.00 3,138,350.00 3,274,800.00 3,547,700.00 0.141329
297,800.00 446,700.00 1,712,350.00 1,786,800.00 1,935,700.00 0.122894
297,800.00 446,700.00 1,712,350.00 1,786,800.00 1,935,700.00 0.106865
545,800.00 818,700.00 3,138,350.00 3,274,800.00 3,547,700.00 0.092926
297,800.00 446,700.00 1,712,350.00 1,786,800.00 1,935,700.00 0.080805
297,800.00 446,700.00 1,712,350.00 1,786,800.00 1,935,700.00 0.070265
545,800.00 818,700.00 3,138,350.00 3,274,800.00 3,547,700.00 0.0611
297,800.00 446,700.00 1,712,350.00 1,786,800.00 1,935,700.00 0.053131
297,800.00 446,700.00 1,712,350.00 1,786,800.00 1,935,700.00 0.046201
545,800.00 818,700.00 3,138,350.00 3,274,800.00 3,547,700.00 0.040174
297,800.00 446,700.00 1,712,350.00 1,786,800.00 1,935,700.00 0.034934
2,697,800.00 4,046,700.00 15,512,350.00 16,186,800.00 17,535,700.00 0.030378
297,800.00 446,700.00 1,712,350.00 1,786,800.00 1,935,700.00 0.026415
297,800.00 446,700.00 1,712,350.00 1,786,800.00 1,935,700.00 0.02297
545,800.00 818,700.00 3,138,350.00 3,274,800.00 3,547,700.00 0.019974
297,800.00 446,700.00 1,712,350.00 1,786,800.00 1,935,700.00 0.017369
297,800.00 446,700.00 1,712,350.00 1,786,800.00 1,935,700.00 0.015103
32,109,750.00 48,164,625.00 184,631,062.50 192,658,500.00 208,713,375.00
 PV OF PROFIT
15% 20% 30%
7,971,293.48 10,628,391.30 15,942,586.96
4,063,156.90 5,417,542.53 8,126,313.80
146,856.25 195,808.33 293,712.50
127,701.09 170,268.12 255,402.17
203,519.30 271,359.06 407,038.59
96,560.37 128,747.16 193,120.74
83,965.54 111,954.05 167,931.08
133,817.24 178,422.99 267,634.48
63,490.01 84,653.35 126,980.02
55,208.70 73,611.61 110,417.41
87,987.01 117,316.01 175,974.02
41,745.71 55,660.95 83,491.42
36,300.62 48,400.83 72,601.24
57,852.89 77,137.18 115,705.77
27,448.48 36,597.98 54,896.97
23,868.25 31,824.33 47,736.49
38,039.21 50,718.95 76,078.42
18,047.82 24,063.76 36,095.65
15,693.76 20,925.01 31,387.52
25,011.40 33,348.53 50,022.80
11,866.74 15,822.32 23,733.47
10,318.90 13,758.54 20,637.80
16,445.40 21,927.20 32,890.80
7,802.57 10,403.43 15,605.14
61,464.59 81,952.79 122,929.18
5,899.87 7,866.49 11,799.73
5,130.32 6,840.42 10,260.64
8,176.27 10,901.69 16,352.54
3,879.26 5,172.34 7,758.51
3,373.27 4,497.69 6,746.53
13,451,921.20 17,935,894.94 26,903,842.41
 APPENDIX B : The Klang Bridge Project

Project NPV Analysis:

Cash flow in construction Period
2016.07.01 Amount Comments
1 Cost of Material by 50% -27,140,000 Assume material input in beginning of the project. Gross/2
2 Cost of Site Preparation -26,420,000
3 Labor by 50% of Gross -3,225,000 Assume labour accured in 2 years. Gross/2
Contingency -2,839,250 5% of 1+2+3 construction cost
-$ 59,624,250
2017.01.01
4 Cost of Material by 50% -27,140,000 Assume material input in beginning of the project. Gross/2
5 Labor by 50% of Gross -3,225,000 Assume labour accured in 2 years. Gross/2
6 Cost of Trees -1,900,000
Contingency -1,613,250 5% of 4+5+6 construction cost
Delay charge -456,250 Assume 5% of 365 days* $25000/ day in the last year
-$ 34,334,500
Estimated annual cost of maintenance :
Sand blasting and painting -840,000
Maintenance and repair -292,000
Accounting and admin -117,000
Miscellaneous -240,000
-$ 1,489,000
Cost of resurfaced -$ 1,240,000 Every 3 years
Refurbishment cost in 25th Year -$ 12,000,000 In today's dollars

NPV&IRR and Sensitivity analysis part 1

Assume construction contract worth $150 million ( performance bond $150 million)
In the given case, $150 million contract value will be paid back in 30 years of period excluded 2 years construction period.
Use 20% as discounted rate, the $150 million payment in single annual dollar amount in 30 years, which equal to about $17 million in today's dollor.
To achieve the IRR as 20%, CHEI needs to quote to get Zero NPV

NPV TRIAL WITH BID PRICE PREDICTION

Investment Hardle Rate 20%
Bid Price Prediction 1,077,178,790

Year Investment Revenue Inerest R&M Resurfaced NCF NPV

0 2016 -$ 59,624,250 -$ 59,624,250 -$ 59,624,250
1 2017 -$ 34,334,500 -$ 34,334,500 -$ 34,334,500
2 2018 - -
3 2019 $ 35,905,960 -$ 3,374,165 -$ 1,489,000 31,042,795.17 $ 17,964,581
4 2020 $ 35,905,960 -$ 3,205,456 -$ 1,489,000 31,211,503.39 $ 15,051,844
5 2021 $ 35,905,960 -$ 3,036,748 -$ 1,489,000 -$ 1,240,000 30,140,211.62 $ 12,112,675
6 2022 $ 35,905,960 -$ 2,868,040 -$ 1,489,000 31,548,919.84 $ 10,565,669
7 2023 $ 35,905,960 -$ 2,699,332 -$ 1,489,000 31,717,628.07 $ 8,851,808
8 2024 $ 35,905,960 -$ 2,530,623 -$ 1,489,000 -$ 1,240,000 30,646,336.29 $ 7,127,358
9 2025 $ 35,905,960 -$ 2,361,915 -$ 1,489,000 32,055,044.52 $ 6,212,482
10 2026 $ 35,905,960 -$ 2,193,207 -$ 1,489,000 32,223,752.74 $ 5,204,316
11 2027 $ 35,905,960 -$ 2,024,499 -$ 1,489,000 -$ 1,240,000 31,152,460.97 $ 4,192,747
12 2028 $ 35,905,960 -$ 1,855,790 -$ 1,489,000 32,561,169.19 $ 3,651,952
13 2029 $ 35,905,960 -$ 1,687,082 -$ 1,489,000 32,729,877.42 $ 3,059,061
14 2030 $ 35,905,960 -$ 1,518,374 -$ 1,489,000 -$ 1,240,000 31,658,585.64 $ 2,465,779
15 2031 $ 35,905,960 -$ 1,349,666 -$ 1,489,000 33,067,293.87 $ 2,146,248
16 2032 $ 35,905,960 -$ 1,180,958 -$ 1,489,000 33,236,002.09 $ 1,797,665
17 2033 $ 35,905,960 -$ 1,012,249 -$ 1,489,000 -$ 1,240,000 32,164,710.32 $ 1,449,768
18 2034 $ 35,905,960 -$ 843,541 -$ 1,489,000 33,573,418.54 $ 1,261,052
19 2035 $ 35,905,960 -$ 674,833 -$ 1,489,000 33,742,126.77 $ 1,056,158
20 2036 $ 35,905,960 -$ 506,125 -$ 1,489,000 -$ 1,240,000 32,670,834.99 $ 852,188
21 2037 $ 35,905,960 -$ 337,416 -$ 1,489,000 34,079,543.22 $ 740,777
22 2038 $ 35,905,960 -$ 168,708 -$ 1,489,000 34,248,251.44 $ 620,370
23 2039 $ 35,905,960 -$ 1,489,000 -$ 1,240,000 33,176,959.67 $ 500,804
24 2040 $ 35,905,960 -$ 1,489,000 34,416,959.67 $ 432,935
25 2041 $ 35,905,960 -$ 1,489,000 34,416,959.67 $ 360,779
26 2042 $ 35,905,960 -$ 1,489,000 -$ 1,240,000 33,176,959.67 $ 289,817
27 2043 $ 35,905,960 -$ 1,489,000 34,416,959.67 $ 250,541
27 25th year -$ 12,000,000 -$ 12,000,000 -$ 12,000,000
28 2044 $ 35,905,960 -$ 1,489,000 34,416,959.67 $ 208,784
29 2045 $ 35,905,960 -$ 1,489,000 -$ 1,240,000 33,176,959.67 $ 167,718
30 2046 $ 35,905,960 -$ 1,489,000 34,416,959.67 $ 144,989
31 2047 $ 35,905,960 -$ 1,489,000 34,416,959.67 $ 120,824
32 2048 $ 35,905,961 -$ 1,489,000 -$ 1,240,000 33,176,960.67 $ 97,059 $ 1 sales to the government included
Total -$ 93,958,750 $ 1,077,178,791 -$ 35,428,727 -$ 44,670,000 -$ 24,400,000 3,000,000
$ - $ 1

Profitability of the project

1 2 3 Notes
Revenue $ 150,000,000 $ 150,000,000 $ 150,000,000
Construction cost 93,958,750 93,958,750 93,958,750
Gross Margin 56,041,250 56,041,250 56,041,250
Gross Margin on Revenue 37% 37% 37%
Sand blasting and painting 840,000 840,000 840,000
Maintenance and repair 292,000 292,000 292,000
Accounting and admin 117,000 117,000 117,000
Miscellaneous 240,000 240,000 240,000
$ 1,489,000 $ 1,489,000 $ 1,489,000
Cost of resurfaced $ 1,240,000 $ 1,240,000
Cost of refurbishment $ 12,000,000

Pre tax income 54,552,250 53,312,250 41,312,250

36% 36% 28%
Note:
1. without consider money time value, the construction revenue and cost are in the normal receivable and payment base
2. every 3 years the resurfaced expense accrued
3. the 25th year when refurbishment expense accrued
 APPENDIX B : The Klang Bridge Project

Project NPV Analysis:

Cash flow in construction Period
2016.07.01 Amount Comments
1 Cost of Material by 50% -27,140,000 Assume material input in beginning of the project. Gross/2
2 Cost of Site Preparation -26,420,000
3 Labor by 50% of Gross -3,225,000 Assume labour accured in 2 years. Gross/2
Contingency -2,839,250 5% of 1+2+3 construction cost
-$ 59,624,250
2017.01.01
4 Cost of Material by 50% -27,140,000 Assume material input in beginning of the project. Gross/2
5 Labor by 50% of Gross -3,225,000 Assume labour accured in 2 years. Gross/2
6 Cost of Trees -1,900,000
Contingency -1,613,250 5% of 4+5+6 construction cost
Delay charge -456,250 Assume 5% of 365 days* $25000/ day in the last year
-$ 34,334,500
Estimated annual cost of maintenance :
Sand blasting and painting -840,000
Maintenance and repair -292,000
Accounting and admin -117,000
Miscellaneous -240,000
-$ 1,489,000
Cost of resurfaced -$ 1,240,000 Every 3 years
Refurbishment cost in 25th Year -$ 12,000,000 In today's dollars

NPV&IRR and Sensitivity analysis part 1

Assume construction contract worth $150 million ( performance bond $150 million)
In the given case, $150 million contract value will be paid back in 30 years of period excluded 2 years construction period.
Use 20% as discounted rate, the $150 million payment in single annual dollar amount in 30 years, which equal to about $17 million in today's dollor.
To achieve the IRR as 20%, CHEI needs to quote to get Zero NPV

NPV TRIAL WITH BID PRICE PREDICTION

Investment Hardle Rate 20%
Bid Price Prediction 1,077,178,790

Year Investment Revenue Inerest R&M Resurfaced NCF NPV

0 2016 -$ 59,624,250 -$ 59,624,250 -$ 59,624,250
1 2017 -$ 34,334,500 -$ 34,334,500 -$ 34,334,500
2 2018 - -
3 2019 $ 35,905,960 -$ 3,374,165 -$ 1,489,000 31,042,795.17 $ 17,964,581
4 2020 $ 35,905,960 -$ 3,205,456 -$ 1,489,000 31,211,503.39 $ 15,051,844
5 2021 $ 35,905,960 -$ 3,036,748 -$ 1,489,000 -$ 1,240,000 30,140,211.62 $ 12,112,675
6 2022 $ 35,905,960 -$ 2,868,040 -$ 1,489,000 31,548,919.84 $ 10,565,669
7 2023 $ 35,905,960 -$ 2,699,332 -$ 1,489,000 31,717,628.07 $ 8,851,808
8 2024 $ 35,905,960 -$ 2,530,623 -$ 1,489,000 -$ 1,240,000 30,646,336.29 $ 7,127,358
9 2025 $ 35,905,960 -$ 2,361,915 -$ 1,489,000 32,055,044.52 $ 6,212,482
10 2026 $ 35,905,960 -$ 2,193,207 -$ 1,489,000 32,223,752.74 $ 5,204,316
11 2027 $ 35,905,960 -$ 2,024,499 -$ 1,489,000 -$ 1,240,000 31,152,460.97 $ 4,192,747
12 2028 $ 35,905,960 -$ 1,855,790 -$ 1,489,000 32,561,169.19 $ 3,651,952
13 2029 $ 35,905,960 -$ 1,687,082 -$ 1,489,000 32,729,877.42 $ 3,059,061
14 2030 $ 35,905,960 -$ 1,518,374 -$ 1,489,000 -$ 1,240,000 31,658,585.64 $ 2,465,779
15 2031 $ 35,905,960 -$ 1,349,666 -$ 1,489,000 33,067,293.87 $ 2,146,248
16 2032 $ 35,905,960 -$ 1,180,958 -$ 1,489,000 33,236,002.09 $ 1,797,665
17 2033 $ 35,905,960 -$ 1,012,249 -$ 1,489,000 -$ 1,240,000 32,164,710.32 $ 1,449,768
18 2034 $ 35,905,960 -$ 843,541 -$ 1,489,000 33,573,418.54 $ 1,261,052
19 2035 $ 35,905,960 -$ 674,833 -$ 1,489,000 33,742,126.77 $ 1,056,158
20 2036 $ 35,905,960 -$ 506,125 -$ 1,489,000 -$ 1,240,000 32,670,834.99 $ 852,188
21 2037 $ 35,905,960 -$ 337,416 -$ 1,489,000 34,079,543.22 $ 740,777
22 2038 $ 35,905,960 -$ 168,708 -$ 1,489,000 34,248,251.44 $ 620,370
23 2039 $ 35,905,960 -$ 1,489,000 -$ 1,240,000 33,176,959.67 $ 500,804
24 2040 $ 35,905,960 -$ 1,489,000 34,416,959.67 $ 432,935
25 2041 $ 35,905,960 -$ 1,489,000 34,416,959.67 $ 360,779
26 2042 $ 35,905,960 -$ 1,489,000 -$ 1,240,000 33,176,959.67 $ 289,817
27 2043 $ 35,905,960 -$ 1,489,000 34,416,959.67 $ 250,541
27 25th year -$ 12,000,000 -$ 12,000,000 -$ 12,000,000
28 2044 $ 35,905,960 -$ 1,489,000 34,416,959.67 $ 208,784
29 2045 $ 35,905,960 -$ 1,489,000 -$ 1,240,000 33,176,959.67 $ 167,718
30 2046 $ 35,905,960 -$ 1,489,000 34,416,959.67 $ 144,989
31 2047 $ 35,905,960 -$ 1,489,000 34,416,959.67 $ 120,824
32 2048 $ 35,905,961 -$ 1,489,000 -$ 1,240,000 33,176,960.67 $ 97,059 $ 1 sales to the government included
Total -$ 93,958,750 $ 1,077,178,791 -$ 35,428,727 -$ 44,670,000 -$ 24,400,000 3,000,000
$ - $ 1

Profitability of the project

1 2 3 Notes
Revenue $ 150,000,000 $ 150,000,000 $ 150,000,000
Construction cost 93,958,750 93,958,750 93,958,750
Gross Margin 56,041,250 56,041,250 56,041,250
Gross Margin on Revenue 37% 37% 37%
Sand blasting and painting 840,000 840,000 840,000
Maintenance and repair 292,000 292,000 292,000
Accounting and admin 117,000 117,000 117,000
Miscellaneous 240,000 240,000 240,000
$ 1,489,000 $ 1,489,000 $ 1,489,000
Cost of resurfaced $ 1,240,000 $ 1,240,000
Cost of refurbishment $ 12,000,000

Pre tax income 54,552,250 53,312,250 41,312,250

36% 36% 28%
Note:
1. without consider money time value, the construction revenue and cost are in the normal receivable and payment base
2. every 3 years the resurfaced expense accrued
3. the 25th year when refurbishment expense accrued