n

PW (i )= F t (1+i)t
t=0

i=
t=
F=
PW =

6.4
5
1500
1099.98

Example 5.3: Cost analysis for the conversion of a school bus fleet to CNG.

PW (i) ( 1+i )n 1
=
A
i ( 1+i )n

PW (i)
i ( 1+i )n =( 1+i )n 1
A

COST ANALYSIS: CASH FLOW FOR CNG CONVERSION ON SCHOOL BUS

TOTAL

DEV.

YR1

YR2

YR3

RM

RM

RM

RM

RM

YR4
RM

,000

,000

,000

,000

,000

,000

INCOME
Fuel Saving (Table 5.15)

4,875,000

162,500

162,500

162,500

162,500

Add. Saving (Table 5.16)

294,000

9,800

9,800

9,800

9,800

Res. Value (Table 5.13)

235,000

172,300

172,300

172,300

172,300

7,380

7,380

7,380

7,380

Land

1,000

1,000

612,040

612,040

6,017,040

613,040

OM Cost (Table 5.14)

221,400

Initial Cost (Table 5.11)

612,040

612,040

Capital (Table 5.11)

Total:
EXPENDITURE

Capital. Cost I (Table 5.12)

Capital. Cost II (~)

500,000
Total:

PROFIT

10,000

1,343,440

612,040

7,380

7,380

7,380

7,380

4,673,600

1,000

164,920

164,920

164,920

164,920

164,920

164,920

164,920

164,920

164,920
-447,120

329,840
-282,200

494,760
-117,280

659,680
47,640

149,927

136,298

123,907

112,643

RECEIPTS:

4,672,600

PW
DISBURSEMENTS:

612,040

Present Receipt Value:

1,474,894

149,927
-462,113

PW
PRESENT VALUE

410,132
-201,908

522,774
-89,266

862,854

Interest Rate: 10

*TCC Ref. pg217:

286,225
-325,815

26.25675 % (Internal Rate of Return)

691,841

34

Total Capitalised Cost: TCC = Initial Cost + Capitalized Cost - PW of Residual Values - Land Cost
* Taking Table 5.12 Capitalised cost, Table 5.3 Resedual cost, Land cost into account.

YR5

YR6

YR7

YR8

YR9

YR10

YR11

RM

RM

RM

RM

RM

RM

RM

YR12
RM

,000

,000

,000

,000

,000

,000

,000

,000

162,500

162,500

162,500

162,500

162,500

162,500

162,500

162,500

9,800

9,800

9,800

9,800

9,800

9,800

9,800

9,800

100,000

172,300

172,300

172,300

172,300

172,300

272,300

172,300

172,300

7,380

7,380

7,380

7,380

7,380

7,380

7,380

7,380

5,000
250,000
7,380

7,380

7,380

7,380

7,380

262,380

7,380

7,380

164,920

164,920

164,920

164,920

164,920

9,920

164,920

164,920

10

11

12

164,920

164,920

164,920

164,920

164,920

9,920

164,920

164,920

824,600
212,560

989,520
377,480

1,154,440
542,400

1,319,360
707,320

102,402

93,093

84,630

76,936

57,803

52,549

1,484,280 1,494,200
872,240
882,160

69,942

3,825

625,177
13,137

718,270
106,230

802,900
190,860

879,836
267,796

949,778
337,738

953,603
341,563

Amount Recovered:

n=
n*=

Pay-Back Period:
Discounted PB Period:
Amount Recovered:

RM 494,760
3.7
5.7
RM
625,177

BUS CONVERSION TO CNG

- Land Cost
1,000,000

nto account.

800,000
600,000
$(,000)

400,000
Zero Interest
!0% Interest

200,000
0
-200,000

-400,000
-600,000
End of Year

YR13

YR14

YR15

YR16

YR17

YR18

YR19

RM

RM

RM

RM

RM

RM

RM

YR20
RM

,000

,000

,000

,000

,000

,000

,000

,000

162,500

162,500

162,500

162,500

162,500

162,500

162,500

162,500

9,800

9,800

9,800

9,800

9,800

9,800

9,800

9,800
100,000

172,300

172,300

172,300

172,300

172,300

172,300

172,300

272,300

7,380

7,380

7,380

7,380

7,380

7,380

7,380

7,380
5,000
250,000

7,380

7,380

7,380

7,380

7,380

7,380

7,380

262,380

164,920

164,920

164,920

164,920

164,920

164,920

164,920

9,920

13

14

15

16

17

18

19

20

164,920

164,920

164,920

164,920

164,920

164,920

164,920

9,920

47,771

43,429

39,481

35,891

32,629

29,662

26,966

1,475

Zero Interest
!0% Interest

YR21

YR22

YR23

YR24

YR25

YR26

YR27

RM

RM

RM

RM

RM

RM

RM

YR28
RM

,000

,000

,000

,000

,000

,000

,000

,000

162,500

162,500

162,500

162,500

162,500

162,500

162,500

162,500

9,800

9,800

9,800

9,800

9,800

9,800

9,800

9,800

172,300

172,300

172,300

172,300

172,300

172,300

172,300

172,300

7,380

7,380

7,380

7,380

7,380

7,380

7,380

7,380

7,380

7,380

7,380

7,380

7,380

7,380

7,380

7,380

164,920

164,920

164,920

164,920

164,920

164,920

164,920

164,920

21

22

23

24

25

26

27

28

164,920

164,920

164,920

164,920

164,920

164,920

164,920

164,920

22,286

20,260

18,418

16,744

15,221

13,838

12,580

11,436

YR29

YR30

RM

RM

,000

,000

162,500

162,500

9,800

9,800
35,000

172,300

207,300

7,380

7,380

7,380

7,380

164,920

199,920

29

30

164,920

199,920

10,396

11,457

POSSIBLE BUSINESS MODEL FOR FULL PRIVATISED OPTION

(Flight Laboratory for Agriculture Applications for Course EAS 3924)
TOTAL

DEV.

YR1

YR2

YR3

YR4

YR5

YR6

YR7

YR8

YR9

RM

RM

RM

RM

RM

RM

RM

RM

RM

RM

RM

YR10
RM

,000

,000

,000

,000

,000

,000

,000

,000

,000

,000

,000

,000

570

570

570

570

570

610

610

610

610

610

INCOME

ASSUMPTIONS
Flying effort of 171 flying hrs per year.

Contract Payment

5,900

Capital

Inflation

5 %

300

300

Lending rate

6.4 %

1,500

1,500

Profit Margin

30 %

7,700

1,800

Loan Repayment

2,069

OM Cost

1,258

Start-up Cost
Sys Acquisition
Amortization (4%)

100
1,700
680

100
1,700

5,807
1,893

Commercial Loan
Total:

570

570

570

570

570

610

610

610

610

610

EXPENDITURE

Total:
PROFIT
(before tax)

210

210

100

105

68

68

1,800

378

192

210
110

210

210

210

210
134

210
141

210
148

179

116

122

128

155

###

68

68

68

###

68

###

68

383

388

394

400

406

412

419

426

402

187

182

176

170

204

198

191

184

208

TOTAL

Loan Repayment Schedule

BF Previous Yr.

1,500

1,500

1,386

1,265

1,136

998

852

697

531

355

168

Repayment

210

210

210

210

210

210

210

210

210

179

Interest

96

89

81

73

64

55

45

34

23

11

1,500

1,386

1,265

1,136

998

852

697

531

355

168

3.333

3.333

3.333

3.333

3.333

3.567

3.567

3.567

3.567

3.567

Balance

1,500

RATE PER FLYING HOUR

(Payment/Flying effort)

COMPOUND INTEREST
2,069 Repayment
569 Interest

Loan Repayment Schedule

BF Previous Yr.
Payment
Interest
Balance

1,500

1,500

1,500

1,596

1,692

1,788

1,884

1,980

2,076

2,172

2,268

2,364

2,460

96

96

96

96

96

96

96

96

96

96

1,500

1,596

1,692

1,788

1,884

1,980

2,076

2,172

2,268

2,364

SIMPLE INTEREST
2,460 Repayment
960 Interest

Loan Repayment Schedule

BF Previous Yr.

1,500

1,500

1,596

1,698

1,807

1,922

2,045

2,176

2,316

2,464

2,622

Payment

2,789

Interest

96

102

109

116

123

131

139

148

158

168

1,500

1,596

1,698

1,807

1,922

2,045

2,176

2,316

2,464

2,622

TOTAL

YR1

YR2

YR3

YR4

YR5

YR6

YR7

YR8

YR9

YR10

10

192

187

182

176

170

204

198

191

184

208

192
379
561
737
-1,608 -1,421 -1,239 -1,063

907
-893

1112 1310 1501 1685

-688 -490 -299 -115

1893
93

Balance

1,500

RECEIPTS:

1,893

Receipts-Disbursements:
DISBURSEMENTS:

1,800

Receipt (Present Value):

1,362

Receipts-Disbursements:

180

165

151

138

125

180
346
497
634
759
(438) -1,620 -1,454 -1,303 -1,166 -1,041

141

128

116

105

112

900 1028 1145 1250

-900 -772 -655 -550

1362
-438

Amount Recovered:

Interest Rate (i)

6.4

Pay-Back Period:
Discounted PB Period:

0.92

Amount Recovered:

FLIGHT LAB PROPOSAL

200
0
-200 1

10

COMPOUND INTEREST
2,789 Repayment
1,289 Interest

RM
n=
n*=
RM

1,893
9.5
10+
1,362

FLIGHT LAB PROPOSAL

200

1
0
1
-200192

RECEIPTS:

Receipt Present Value:

PRESENT VALUE:
(Receipts-Disbursements)

300 -400
-600
180
1,362
-800

RM (,000)

DISBURSEMENTS:

2
2
187

165

10

3182 4 176 5 1706 2047 1988

9
191

10
184

208

116

105

112 Zero interest

With interest

151

138

125

141

128

1,062-1,000

Interest Rate (i) 6.4

Amount Recovered:

-1,200
-1,400

Pay-Back Period:
Discounted PB Period:

62

-1,600

Amount Recovered:

-1,800
End of Year

RM
n=
n*=
RM

379
2
2
346