Number).

The
actual Bus
costs around
Rs.70,00,000.
The Income
However
Tax along
with the vehicle
Department
there are
follows the
additional
written down
charges
value method levied
likedepreciation.
of -
Registration,
The specified
Insurance,
rate for
Taxes, etc. is
depreciation
40% as per the
Financial Modeling Also
IT ACT. Casethe
since - Premium Bus Service
bus will be
usedCompany
The for hire Interest rate
purpose,
Act prescribes we value if
leave
a rate some
Assumptions of- Bus High
expected
Assumptions -yield to be
Financing Assumptions - General
margin for
16.21% forthe
the assumed.
high as theThis
accessories of
depreciation is done will on be Figures
Cost of Bus vehicle
thatbus
the mght usedget 7,500,000 Debt 5,625,000
purpose
used for to
75% Tax Rate
assumed for
33%
Maintenance / yearforaddedhireto it. 10% Equity 1,875,000
check
commercial if this 25% Interest Income the driver cost 5%
purpose.
Escalation Rate - Maintenan 15% Interest on Debt Miscellaneous
project
purposes. lies 15% and
Diesel rate (Rs./Lit) 64
Some amount
Life of Bus (years) This translates 4 Tenure of loan (years)costs
higherwill up on 4 miscellaneous
Diesel Price escalation 15%
will have
into an to be include,
the Investment the expenditures
Deprecation Rate spent on 25% SLM Cost of Equity 20% Inflation 10%
asumption of 6 costs for
Opportunity
acquiring
years for the All parking
schedule. the bus
India
Assumptions -usefule Permit,
Operating ofto
lifeRevenues Assumptions in -aOperating
shade. Costs Assumptions - Operating General
use bus.
the the bus for
transportation
Seating Capacity purpose. This 35 Fuel Efficiency ( Km /Amount
L) acts as 5 Route Mumbai - Pune
However a buffer and
Load Factor cost for at
looking state
the of 50% Driver Cost (Rs./ Trip)also takes into 600 Distance (Kms) 155
Maharashtra
Tariff (Rs./Ticket) working 360.00 Miscellaneous (Rs. / Trip)
consideration 300 Estimated Time Hours/Trip 3
(case in point)
conditions
Escalation Rate - Tariff and 10% the costs
Toll Amount (Rs. / Trip) 800 Trips / Day 4
is Rs.5,000.
usages we associated with
Interest Working days in a year 365
Source: Income
assume a the co-driver
Income Statement on Surplus
http://transport.
usefule life of
Cash.
delhigovt.nic.in/
the bus at 4 Year - 0 Year - 1 Year - 2 Year - 3 Year - 4
Flag Find out as % 0
transport/tr8.ht
years. 1 2 3 4
of
m Opening
Revenue (Unit*per
Cash unit)
Balance 9,198,000 10,117,800 11,129,580 12,242,538 Unit * Per Unit = Revenue
Other Income - 49,170.80 105,287.80 168,057.95 Seat occupied * Ticket Price =
Fuel Costs 2,896,640 3,331,136 3,830,806 4,405,427 35*50% * 360 = 6300 Per trip
Maintenance Expenses 750,000 862,500 991,875 1,140,656 25200 per day
Driver Costs 876,000 963,600 1,059,960 1,165,956 9198000 per year
Miscellaneous Costs 438,000 481,800 529,980 582,978 L Km
Toll Amount 1,168,000 1,168,000 1,168,000 1,168,000 Lit Req * Diesel Price = Fuel Cost 1 5
Cost of Revenues 6,128,640 6,807,036 7,580,621 8,463,018 31 * 64 = 1984 Per trip 31 155

Gross Pofit / (EBITDA) 3,069,360 3,359,935 3,654,246 3,947,578 7936 per day
2896640 per year
Depreciation 1,875,000 1,875,000 1,875,000 1,875,000
Interest Expense 843,750 674,776 480,456 256,988
Profit Before Tax 350,610 810,159 1,298,790 1,815,590
Income Taxes 115,701 267,352 428,601 599,145 EMI Equal Monthly Installment
Profit After Tax 234,909 542,806 870,189 1,216,445 EAI Equal Annual Installment

Balance Sheet
Year - 0 Year - 1 Year - 2 Year - 3 Year - 4 Debt Schedule
Assets Year - 0 Year - 1 Year - 2 Year - 3 Year - 4
Cash - 983,416 2,105,756 3,361,159 4,739,350 BOP - Debt 5,625,000 4,498,507 3,203,041 1,713,254
PPE, Gross (Cost Value) 7,500,000 7,500,000 7,500,000 7,500,000 7,500,000 Int Expense 843,750 674,776 480,456 256,988
Acc Depreciation - 1,875,000 3,750,000 5,625,000 7,500,000 EAI 1,970,243 1,970,243 1,970,243 1,970,243
PPE, Net (Book Value) 7,500,000 5,625,000 3,750,000 1,875,000 - EOP - Debt 5,625,000 4,498,507 3,203,041 1,713,254 -
Total Assets 7,500,000 6,608,416 5,855,756 5,236,159 4,739,350
Principle Repaid 1,126,493 1,295,466 1,489,786 1,713,254
Liabilities
Debt 5,625,000 4,498,507 3,203,041 1,713,254 -
Equity 1,875,000 1,875,000 1,875,000 1,875,000 1,875,000
Retained Profit - 234,909 777,715 1,647,905 2,864,350
Total Liabilities 7,500,000 6,608,416 5,855,756 5,236,159 4,739,350
Checksum - - - - -

Cash Flow Statement

Year - 0 Year - 1 Year - 2 Year - 3 Year - 4

Net Income (PAT) - 234,909 542,806 870,189 1,216,445

Depreciation - 1,875,000 1,875,000 1,875,000 1,875,000
Cash Flow From Operations - 2,109,909 2,417,806 2,745,189 3,091,445
Capex (7,500,000) - - - -
Cash Flow from Investing (7,500,000) - - - -
Debt (Repayment)/Issuance 5,625,000 (1,126,493) (1,295,466) (1,489,786) (1,713,254)
Equity Addition 1,875,000 - - - -
Cash Flow from Financing 7,500,000 (1,126,493) (1,295,466) (1,489,786) (1,713,254)
Net change in Cash - 983,416 1,122,340 1,255,403 1,378,191
Cash - BOP - - 983,416 2,105,756 3,361,159
Cash - EOP - 983,416 2,105,756 3,361,159 4,739,350
Checksum
Average Cash

Free Cash Flow - Equity

Year - 0 Year - 1 Year - 2 Year - 3 Year - 4

Net Income - 234,909 542,806 870,189 1,216,445

+ Depreciation - 1,875,000 1,875,000 1,875,000 1,875,000 Escalation Rate %- Tariff
- Capital Expenses (7,500,000) - - - - 1,115,059 3% 5% 8% 10% 13%
- Debt Repayment/+ raised 5,625,000 (1,126,493) (1,295,466) (1,489,786) (1,713,254) 3% 344583.93 887242.59 1446185.75 2021692.01 2614040.02
Diesel Price %

Cash Flow to Equity (1,875,000) 983,416 1,122,340 1,255,403 1,378,191 5% 173689.52 716348.18 1275291.34 1850797.60 2443145.61
8% -2333.21 540325.45 1099268.60 1674774.87 2267122.88
10% -188150.58 359086.65 918029.80 1493536.07 2085884.08
Returns Analysis - Equity 13% -423334.27 172544.04 731487.19 1306993.46 1899341.47
Year - 0 Year - 1 Year - 2 Year - 3 Year - 4 15% -694538.06 -19390.12 539553.03 1115059.30 1707407.30

FCFE (1,875,000) 983,416 1,122,340 1,255,403 1,378,191

cumulative cashflow (1,875,000) (891,584) 230,756 1,486,159 2,864,350

Cost of Equity 20.0% Profit from the project without considering time value of money
NPV 1,115,059 Accept
IRR 47.14% Accept