A School Project

PARAMETERS
No. of classes 5 Contrctn Cost per sq ft (Rs)
No. of students per class 50 Staff cost per month(Rs)
No. of Sq ft per stdnt 30 Staff-Cost-inc-perYr(fraction)
Operational-Costs-Per-Yr(Rs)
Op-Cst-incr-perYr
Assume: The Construction Cost is incurred at 0
All the five classes are started and staff are in place from 1 onwards
Staff and Operational costs in an yr are incurred at the beginning of the year
The cash flows are to be evaluated over a period of 10 years
The discount rate to be used in the analysis is 0.1 per Rs per yr
Ignore other costs
MAIN COMPUTATIONS
Yr-No. 0 1 2 3 4 5
Fee-Revenue 0 7500000 7500000 7500000 7500000 7500000
Constr-Cost 3000000 0 0 0 0 0
Staff-Cost 0 840000 924000 1016400 1118040 1229844
Operational-Cost 0 25000 26250 27562.5 28940.63 30387.66
Net-Cash-Flow -3000000 6635000 6549750 6456037.5 6353019 6239768
NPV ₹ 35,261,894.35
IRR 220%

SENSITIVITY ANALYSIS
Data-Table-fee-vs-NPV Data-Table-No-of-Students-&-Fee-vs-NPV
₹ 35,261,894.35 ₹ 3,526.19 5000 6000
5000 20
6000 25
7000 30
8000 35
9000 40
10000 45
11000 50
 Solution by V. Venkata Rao
TERS
400 Fee/Student/Yr 30000
70000 DiscountRate 0.1
0.1
25000
0.05

6 7 8 9 10 Results from Goal Seek:

7500000 7500000 7500000 7500000 7500000 1. With fee at Rs 30,000/yr, no. of students /class
0 0 0 0 0 2. With No. of students at 50 per class, fee/student in
1352828 1488111 1636922 1800615 1980676
31907.04 33502.39 35177.51 36936.39 38783.21
6115265 5978386 5827900 5662449 5480541

SENSITIVITY ANALYSIS
&-Fee-vs-NPV
7000 8000 9000 10000
Effect of No.ofStudents and Fee on NPV
12

10

8
Fee/Stdnt/Yr

0
15 20 25 30 35 40 45 50 5
No.ofStdnts/Class

Rs1500 Rs1600 R1700 Rs1800 Rs1900 Rs20

 of students /class 9.0779 Round it up to 10
er class, fee/student in 7,046

nd Fee on NPV

40 45 50 55
Class

Rs1800 Rs1900 Rs2000

10 100 10 15 20 30 28 32.5 17.5
30 200 150 225 300 450 420 487.5 262.5
40 400 600 900 1200 1800 1680 1950 1050
50 500 500 750 1000 1500 1400 1625 875
60 550 300 450 600 900 840 975 525
70 600 100 150 200 300 280 325 175
 12.5 11
187.5 165
750 660
625 550
375 330
125 110