* Payment Date of Train and Train Delivery Time is Fixed= 1 years

*Only Construction Time will Varry

Required Rate of Return 8%
Payment After (Years)
Initial Investments 1 No. of Trips/ Day
Train Purchasing Cost ₹ 100,000,000 ₹ 100,000,000 Total Running Days
Infratructure Cost ₹ 250,000,000 ₹ 250,000,000 Total Life Time( in Years)
Fixed Operating Cost/ Year
NPV at 8% Return rate Variable Cost/ Passenger
Total ₹ 350,000,000 ₹ 324,074,074 Ticket Price
Total Trips/ Year
NPV of Total
Implementation Cost at ₹ 674,074,074
the Starting of 2013
No. of Passenger per Trip
1000
NPV of Total Operating 900
Profit for the whole 800
₹ 863,520,375
lifetime of Trains when 700
Construction Finishes 600
500
NPV of Total Operating
Profit for the whole Total
lifetime of Trains at the ₹ 799,555,902.99
Starting of 2013

NPV of Net Profit of the ₹ 125,481,829

Project at Start of 2013
They Should Go for the Project

Scenarios when NPV of Net Profit will become

0 ₹ 125,481,829
Scenario 1 10
Train Life time (Years) 7.83 9
Construction Time (Yrs) 1 8
Running Days 330 7
Scenario 2 6
Construction Time
Train Life time (Years) 10 5
Construction Time (Yrs) 4.24 4
Running Days 330 3
Scenario 3 2
Train Life time (Years) 10 1
Construction Time (Yrs) 1
Running Days 301
Salvage Value Scenarios

Price/ Train ₹ 200,000,000

Scrap Value ₹ 100,000,000
Depriciation/train/ Year ₹ 10,000,000
(Straight Line Method)

NPV of Scrap Value after LifeTime of Train at starting of 2013

₹ 42,888,285.93

In Case of Salvage Value

The NPV of Net Profit
will be
₹ 168,370,114.85
* Train Lifetime is Calculated after the Construction Finish Date

Train 1 Train 2
2 2
330 330
Starting from
10 10 Construction Finish
₹ 100,000,000 date
₹ 25 ₹ 25
₹ 250 ₹ 250
660 660

Probability No. of Trips Revenue/ Train/ Year Variable Cost/ Train/ Year
0.1 66 ₹ 16,500,000 ₹ 1,650,000
0.2 132 ₹ 29,700,000 ₹ 2,970,000
0.3 198 ₹ 39,600,000 ₹ 3,960,000
0.2 132 ₹ 23,100,000 ₹ 2,310,000
0.1 66 ₹ 9,900,000 ₹ 990,000
0.1 66 ₹ 8,250,000 ₹ 825,000
1 660 ₹ 127,050,000 ₹ 12,705,000

So, Operating Profit/ Train/ Year

₹ 114,345,000
Total Operating Profit/ Year (For 2 Trains)
₹ 128,690,000

Sensitivity Analysis (Train Life Time vs.

Construction Time)
Train Life Time
10 9 8 7
6 5 4 3
2 1