Business Case For A Carpark Development

Table of Contents
1. EXECUTIVE SUMMARY............................................................................................................. 4
2. PROJECT SUMMARY .................................................................................................................. 5
2.1. Project Description.................................................................................................................. 5
2.2. Objectives ............................................................................................................................... 5
2.3. Scope ....................................................................................................................................... 5
2.4. Anticipated Outcome .............................................................................................................. 6
2.5. Stakeholders and Consultation ................................................................................................ 7
2.5.1. Stakeholders .................................................................................................................... 7
2.5.2. Consultation .................................................................................................................... 7
3. APPROACH ................................................................................................................................... 7
4. STRATEGIC ALIGNMENT .......................................................................................................... 8
4.1. Definition and Purpose of Strategic Alignment ...................................................................... 8
4.2. Strategic Alignment Perspective ............................................................................................. 8
4.3. Organisational Strategic Alignment ........................................................................................ 8
4.3.1. Strategy Execution .......................................................................................................... 8
4.3.2. Technology Potential ...................................................................................................... 8
4.3.3. Competitive Potential...................................................................................................... 9
4. ALTERNATIVES........................................................................................................................... 9
4.1. Financial Alternatives ............................................................................................................. 9
4.1.1. Option One ...................................................................................................................... 9
4.1.2. Option Two ................................................................................................................... 10
4.2. Operational Proposal ............................................................................................................. 10
5. PROJECT RISK ASSESSMENT ................................................................................................. 12
5.1. Risk Management System Description ................................................................................. 12
5.2. Risk Management Process .................................................................................................... 13
6.3. Risk Identification................................................................................................................. 13
6.3.1. Risk Management team composition ............................................................................ 13
6.3.2. Key findings and their categorisation ........................................................................... 14
6.3.2.1. List of Risks .................................................................................................................. 14
6.3.2.2. Categorisation of Risks ................................................................................................. 14
6.4. Risk Assessment ................................................................................................................... 15
6.4.1. Qualitative method risk assessment .............................................................................. 15
6. BENEFIT/COST ANALYSIS ...................................................................................................... 16
6.1. Project Analysis .................................................................................................................... 16
6.1.1. Project Expenditure ....................................................................................................... 16
6.1.2. Expected Income from Project Operation ..................................................................... 17
6.1.3. Income and Cash Flow Statements ............................................................................... 19
6.1.3.1. NPV Summary .......................................................................................................... 19
6.1.3.2. Income Statement and Cash Flow Statement ............................................................ 19
6.1.4. Benefit-Cost Ratio......................................................................................................... 20
6.2. Option Analysis .................................................................................................................... 21
6.2.1. Optimistic Option.......................................................................................................... 21
6.2.1.1. Underlying Assumptions............................................................................................... 21
6.2.1.2. Project Expenditure ....................................................................................................... 21
6.2.1.3. Expected Income from Project Operation ..................................................................... 22
6.2.1.4. Income and Cash Flow Statement ................................................................................. 24
6.2.1.4.1. NPV Summary .......................................................................................................... 24
6.2.1.4.2. Income Statement and Cash Flow Statement ............................................................ 24
6.2.1.5. Benefit-Cost Ratio......................................................................................................... 25
6.2.2. Pessimistic Option......................................................................................................... 26
6.2.2.1. Underlying Assumptions............................................................................................... 26
6.2.2.2. Project Expenditure ....................................................................................................... 26
6.2.2.3. Expected Income from Project Operation ..................................................................... 27
6.2.2.4. Income and Cash Flow Statements ............................................................................... 29
6.2.2.4.1. NPV Summary .......................................................................................................... 29
6.2.2.4.2. Income Statement and Cash Flow Statement ............................................................ 29
6.2.2.5. Benefit-Cost Ratio......................................................................................................... 30
7. IMPLEMENTATION STRATEGY ............................................................................................. 31
7.1. Purpose of the Implementation Plan ..................................................................................... 31
7.2. Implementation Plan ............................................................................................................. 31
7.2.1. Project personnel ........................................................................................................... 31
7.2.2. Training ......................................................................................................................... 31
7.3. Implementation Timeline ...................................................................................................... 31
7.4. Project Structure and Reporting ............................................................................................ 32
8. CONCLUSION AND RECOMMENDATION ............................................................................ 33
9. BASIS OF ESTIMATE ................................................................................................................ 34
9.1. CAPEX ................................................................................................................................. 34
9.2. OPEX .................................................................................................................................... 34
9.3. DISCOUNT RATE ............................................................................................................... 34
9.4. INCOME CALCULATION ................................................................................................. 34
9.5. INCOME AND CASH FLOW CALCULATION ................................................................ 35
Figure 1:NPV Chart of Option One ........................................................................................................ 9

Figure 2: NPV Chart of Option Two .................................................................................................... 10
Figure 3: NPV Chart of Operational Proposal ...................................................................................... 11
Figure 4: Risk Management framework (Victorian Government) ........................................................ 12
Figure 5: NPV of the project ................................................................................................................. 20
Figure 6: NPV of Optimistic Option ..................................................................................................... 25
Figure 7: NPV of Pessimistic Option.................................................................................................... 30
Table 1: Categorisation of Risks ........................................................................................................... 14

Table 2: Risk Assessment ..................................................................................................................... 15
1. EXECUTIVE SUMMARY
This document sets out the policy and implementation plan for the development of a carpark facility
undertaken by Auckland Construction Contractor Corporation at Griffith University on its Southbank
Campus, Brisbane, Australia.
Griffith University is a public university with five campuses based in Brisbane and on the Gold Coast
in Southeast Queensland, Australia. The University is regarded as one of Australia's most innovative
tertiary institutions and one of the Asia-Pacific region's most influential universities.
Due to its current rapid expansion as well as the predicted future growth in size and the number of
student enrolments, the University has recently approached Auckland Civil Construction Corporation
(ACCC) for a new construction of a carpark facility at one of its campuses in Brisbane to
accommodate the demand from its staff and students.
This is one major development which will establish ACCC’s presence in one of the fastest growing
regions in Australia. Therefore all aspects of the project have been looked at and carefully analysed to
effectively assist the Corporation Board’s decision making process. Areas which have been identified
as being critical include:
• Corporation’s long term strategic goals

• Feasibility of the Project in term of cost
• Opportunity to increase Corporation’s public image through commercialisation
• Operational options and opportunities after the completion of project construction
Consultation has been undertaken with all parties likely to be affected by the development. This
includes:
• Letters to all potential affected parties

• Follow up phone calls
• Meeting with regulatory authorities
• Preparation of project brochures
• Public notification on popular media
A detailed description of consultation taken in relation to the project is contained in the subsequence
section.
The Implementation Plan has also been developed to establish the methodologies under which project
procedures will be carried out. It also sets out the roles and responsibilities to appropriate authorities
throughout the economic life of the project.
2. PROJECT SUMMARY
2.1. Project Description
The project will be developed in Southbank which is located in the centre of Brisbane and is one of
the University’s main campuses in this city. It has been identified that majority of the 5,500 students
attending this campus live in nearby suburbs and most of whom drive to the University. There is also
700 full-time staff on this campus and the current capacity of the University carpark is 300 spaces and
12 visitor spaces. This has caused a major inconvenience for the University personnel and its students
for some time.
The proposed development will consist of a 1200 carpark facility which has the pay-and-display
ticketing method with the flat hourly charge of $1.50 on everyday of the week. The University will
not provide any funding for this development. However, ACCC and Griffith University have come to
an agreement with the main conditions are as follows:
• The main contract between the organisations is the Build-Own-Operate-Transfer contract

where ACCC will collect all revenues and is liable for all risks and costs associated with the
facility
• The University will lease the land it owns to ACCC at the rate of $1 per annum
• At the end of the concession period of 20 years, the ownership of the carpark facility is to be
transferred to the University for a pre-agreed sale price of $1
2.2. Objectives
The primary objective of the development is to provide more options to staff and students of the
Griffith University by increasing the capacity of the University’s current carpark. The project will also
meet the increasing demand for parking spaces from the growth of University in the future.
With the successful delivery of this development, students who attend the University have an
opportunity to reduce the cost of parking by diverting from more expensive nearby commercial
carparks in the Brisbane City Centre.
This project also provides ACCC a valuable opportunity to expand its business to one of the fastest
growing regions in Australia. By developing a strong reputation through this project, ACCC will
establish its presence in the region and build a foundation for future expansion in this part of
Australia. The company is therefore keen on developing a good relationship with the Client-Griffith
University by committing its resources and expertise in the field of carpark facility development to
successfully delivering the project.
2.3. Scope
The existing carpark at Griffith University comprise 300 on grade parking spaces for students and
staff and 12 visitor spaces. The current capacity of the facility is inadequate to accommodate the
growing demand from students attending the University. A forecast carried out by the University
recently indicates a strong growth in the number of enrolments in a near future partly due to the
economic crisis, but mostly due to a growing demand from employers of qualified staff. This has put
an immense pressure on the capacity and infrastructure of the existing facility.
The new carpark facility development at Griffith University will consist of 1,200 parking spaces for
all university staff and its students. The total area available for this development is 33,000 m²
exclusive of additional facilities, i.e. 27.5m² per carpark.
From our experience in designing and constructing multi-storey carpark facilities, ACCC has
estimated that the base rate of construction cost is $600 per m². It has also been predicted that an
investment of $1,000,000 will be required for a major refurbishment in year 10 in the life of the
project. This reflects the commitment of ACCC to maintain the integrity of the facility throughout the
functional life of the project.
The location of development will have some implications on the project’s logistic and operational
requirements. The construction during the academic year will have to be undertaken at a manner
which minimises any adverse effects on the convenience of University staff/students and on the
operations of nearby businesses as well as any major disruptions on the local transport network.
As a consequence, there are several related costs associated with the development of the project. They
include the consent and legal costs as well as the development levies required by the Brisbane City
Council. ACCC, however, is committed to comply with all requirements for the development of the
project and is willing to provide the authority with necessary assistance to get the project off the
ground.
2.4. Anticipated Outcome
As noted earlier, majority of students attending the Southbank Campus live in nearby suburbs and use
private vehicles as the main mean of transport to the University. The limited capacity of the existing
carpark has forced a significant number of students into using public transport or other means of
transportation and this has caused some major inconvenience for these individuals because of the
inconsistency of the public transport network in the City.
Those who drive to the University have to park their vehicles at more expensive commercial carparks
in the City Centre. This also affects the financial positions of these individuals and can also cause
some inconvenience to them due to the distance from these carparks to the University. The decision to
develop a carpark on the University ground is to counteract these problems that Griffith University
students face.
ACCC and Griffith University expect the development will provide staff and students of the
University with more options and convenience in term of transportation modal choices and parking
facility. The developers also hope to attract more students to attend the University through this project
as it also aims at meeting the expected growth in student enrolments to the University in a near future.
From a business point of view, it is also a good business venture, because along with the increase in
usage of the facility, the potential for a good income offered to the University after the handover or
the Operator(s) also increases. Given the number of students parking their vehicles at more expensive
commercial carparks in the City, after the completion of the project, these individuals will be more
than happy to utilise the University facility, which offers reasonable price as well as convenience.
This expectation is one of the main reasons that ACCC is interested in the development of this
project, as it can provide the organisation a significant income during the operational life of the
project (19 years).
2.5. Stakeholders and Consultation
2.5.1. Stakeholders
The main stakeholders in this project have been identified as follows:
1. Griffith University
2. Brisbane City Council
3. Brisbane Regional Council
4. Southbank Business Association
5. Southbank Recreation Association
6. Brisbane Transport Agency
7. Queensland Transport Agency
8. Queensland Rail
Each of these stakeholders is either directly or indirectly affected by this project. Appropriate
consultation strategies have been or will be carried out accordingly to address any new developments
in the project in a timely manner.
2.5.2. Consultation
The purpose of the consultation is to support authorisations required under the Queensland State law
and under the Australian Federal law.
The Consultation Strategy identifies the stakeholders considered to have an interest in this project as
well as directly affected parties and parties affected by proximity to the proposed works. A database
of these parties and stakeholders has been developed. All parties and key stakeholders in the database
have been contacted regarding the project with the main communication channel being:
• Media release and Advertising: prepared and distributed by authorised agents on popular
media and on publications
• Brochure: project specific brochure has been produced and utilised to serve as a basic outline
of the project
ACCC and Griffith University will continue to liaise and communicate with these parties,
stakeholders and the wider community during the project to mitigate the effect of the construction.
3. APPROACH
The approach of this business case is comprehensive and involves a process which looks beyond
financial estimates. Although financial estimates are of critical importance, they do not capture certain
issues. At the same time it is important to understand that the estimates, financial and other, which are
used for investment evaluation, are always opinions about the future and are thus not as accurate as is
suggested or thought.
The basic steps of the business case process include the following:
1. Identify viable alternatives that solve the decision-making problem.
2. Analyze the alignment of the alternatives to strategic objectives at the Government, Ministry
and Program levels.
3. Review all stakeholders that have an interest in either alternative.
4. Complete a Quantitative and Qualitative cost/benefit analysis.
5. Complete a Risk Assessment to develop a Risk Factor.
6. Final Recommendation.
4. STRATEGIC ALIGNMENT
4.1. Definition and Purpose of Strategic Alignment
Strategic alignment is the process of linking innovation strategies with corporate vision, goals,
objectives, and strategy. When alignment is attained firm gains competitive advantage and increase
performance.
The cost and time required to create a new product or service are so large that lack of a perfectly
aligned and executed innovation strategy can be extremely wasteful. Strategic alignment creates a
directional beacon that defines which domains to explore and which ones to avoid.
4.2. Strategic Alignment Perspective
The Strategic Alignment model of developed by Venkatraman, Henderson and Oldach, which is a
framework to Aligning Business and IT Strategy, has been utilised by ACCC in the organisation’s
Development Plan. It contains three main points:
1. Strategy Execution
2. Technology Potential
3. Competitive Potential
4.3. Organisational Strategic Alignment
This document tries to capture the essential points in the ACCC Development Plan which may be
relevant and applicable to this development and are beneficial to the organisation. The reader can
refer to the ACCC Development Plan for more in depth discussions on the overall organisational
goals and strategies for the organisation’s future developments.
4.3.1. Strategy Execution
Decision on undertaking the construction of the carpark facility at Griffith University had been
thoroughly considered at all managerial levels, by appropriate authorities at ACCC. The project aligns
with the overall growth plan of the Corporation.
ACCC aims at expanding the business to Australia, because the country has long been identified as an
ideal market for the Corporation’s long-term future growth, based on its economic growth and the
booms in property developments in recent years. Southeast Queensland in particular is the main focus
of ACCC as it has been the fastest growing region in the entire country. This project provides an
opportunity to for ACCC to establish the presence in this State, which will in turn assist the
organisation to grow in the future.
4.3.2. Technology Potential
ACCC has recently commissioned a research to develop a new type of structural beam to column
connection for carparks. The research has yet to complete, but the Corporation is confident in the
success of the research.
The successful development of this mini project will see its implementation to this development,
which in turn will reduce the entire project construction cost by 1% to 2%.
4.3.3. Competitive Potential
ACCC has significant experience in development and management of carpark facilities in Australasia.
Along with the success of the research project, the Corporation can provide a distinctive advantage in
this sector.
4. ALTERNATIVES
The project has been seriously considered by the Board of ACCC. This development is ACCC’s first
Design-Build-Operate-Transfer projects in Australia. Therefore, many alternative approaches
regarding the project’s financial matters as well as its operational options have been looked at. These
matters have been thoroughly discussed and carefully planned by the Corporation’s authorised
personnel and their Consultants.
The following are options and their proposed mitigations plans developed after a series of such
meetings.
4.1. Financial Alternatives
One serious problem faced by ACCC in this project is that 80% of the Capital Outlay comes from
debts. In addition to this, the Client, Griffith University does not provide any funding for this project.
It is therefore essential that the financial matters must be effectively and successfully managed if the
Corporation is to make profits from the project.
From this realisation, there have been many proposed financial management methods put forward to
ensure profitability for ACCC is made while paying off the principal loan in a timely manner. These
are the options which have been looked at.
4.1.1. Option One

Option One suggested that the Corporation should pay off the principle loan in year 10, after some
profits have been realised while keep paying the interests on the loan at the agreed rate in prior years.
The effect of this proposed method is shown in the analysis below:
Figure 1: NPV Chart of Option One
The graph shows a significant drop in the Corporation’s cash flow due to the outgoing of a substantial
amount of money. This effect will nonetheless produce a negative view of the Corporation to the
investors and its shareholders.
In order to avoid this effect, an alternative method has been proposed.
4.1.2. Option Two
This option looks at another approach which ACCC can take to reduce its loan repayments and loan
interest without causing significant changes to its net cash flow over the life of the project.
It is proposed that ACCC should make a payment to the bank on top of the interest payment. This
means the Corporation will make a payment at the 30% rate of the Corporation’s PBIT (inclusive of
the 9% interest charge). The implication is that the excess 21% from this will go towards the loan
repayment. It has been estimated that it will take ACCC 9 years from its first year in operation (i.e. at
the end of year 10) to complete this repayment. From this time to the end of the concession period,
ACCC will not have to make any payments to the bank.
The following graph shows the effect of this approach:
Figure 2: NPV Chart of Option Two

The kink at year 10 is not as steep as the one shown previously. Furthermore, the net present value of
the whole project is always in the positive domain. This will provide ACCC’s investors and
shareholders a more positive expectation than the previous case does.
4.2. Operational Proposal
The main proposal which has been put forward is the idea of commercialising the carpark facility
during the holiday of the academic year.
Parking spaces in the City Centre of Brisbane has always been a major problem in the city. During
holiday period of the academic year, even though the number of attendance at the University is lower
than any other time of the year, the average number of trips to the city taken by workers remains
constant. This provides an opportunity for ACCC to make a profitable income from these individuals
by commercialising the carpark during the week. This means the capacity of the facility will be fully
utilised and this in turn will have a significant impact on the net cash flow of the Corporation.
The graph below illustrates the effect of the idea if it is successfully implemented.
Figure 3: NPV Chart of Operational Proposal
The graph shows a significant increase present value in the cash flow in year 10 from the previous
cases (from -$3,827,338.65 to $1,386,585.72 to $2,716,543.25). This illustrates the positive effects
that the commercialisation of the carpark facility during the holidays contributes to the organisational
income of ACCC.
5. PROJECT RISK ASSESSMENT
5.1. Risk Management System Description
A Risk Management system has been set up to identify, analyse, evaluate and mitigate any adverse
events efficiently and effectively should they occur during the development of the project. This
system is based on the framework recommended in the Australian/New Zealand Risk Management
Standard 2003.
The overall process is presented by the following diagram:
Figure 4: Risk Management framework (Victorian Government)

5.2. Risk Management Process
According to the Australian/New Zealand Risk Management Standard, the risk management process
is comprised of five phases: establishing the context, risk identification, risk assessment, risk
evaluation and risk treatment, along with the continuous monitoring process.
The following sections describe the suggested risk management process, which can be tailored to best
meet the needs of the project and/or satisfy the customer.
• Establishment of context: Project objectives, such as organisational goals, priorities, can be

extracted from the general purpose of the project in order to understand what kind of risks to
care about. Risk management context, structure of the risk assessment process and their
criteria must also be stated to build a structured risk management system
• Risk identification: There should be an involvement of a range of interested parties. Critical
questions can be asked and open discussions are encouraged in order to find risks which
otherwise may be overlooked
• Risk analysis: Risks must be categorised and ranked systematically so that quantitative
analysis method can be easily carried out. The purpose of the analysis is to find the potential
impacts that these risks have on the project
• Risk evaluation: The goal of this stage is to compare the output of the risks analysed earlier
with the set criteria and to prioritise them accordingly. Any risks require treatments will be
carried on to the next stage
• Risk treatment: This stage develops and implements specific cost-effective strategies and
action plans for increasing potential benefits and reducing potential costs. In this process,
ownerships of the risks can also be assigned to appropriate parties
• Risk monitoring: This is a continuous process in the overall risk management framework. It
tracks progress against action plans and established metrics to ensure timely completion of
actions.
6.3. Risk Identification
Risk identification is the process of examining the project areas and each critical technical process to
identify and document the associated risks. The identification of potential issues, hazards, threats and
vulnerabilities that could negatively affect work efforts or plans is the basis for the risk management
strategy.
6.3.1. Risk Management team composition
• Mr. Van Tran-Project Manager

• Mr. Aman Kumar-Risk Manager, Fulton Hogan
• Mr. John Smith-Regional Manager, Queensland Transport Agency
• Ms. Joan Smyth-General Manager, Southbank Business Association
• Mrs. Amanda Cranston-Community Manager, Brisbane City Council
• Mr. Ron McDowall-Chief Commissioning Engineer, Beca
• Mr. Garry Miller-Facilitator, Griffith University
6.3.2. Key findings and their categorisation
The findings and their respective categories are given below. The results has been summarised after
sessions of brainstorming activity undertaken by appropriate personnel and representatives from
associated parties.
6.3.2.1. List of Risks
1) Noise pollution
2) Vibration
3) Air pollution (dust, burnt fuel)
4) Contractors not following designed
specification
5) Change in Government policies
6) Inflation
7) Project going over budget
8) Lack of skilled workers
9) Employment strike
10) Breach of Contract
11) Failure in Quality Management system
12) Tendering process failure
13) Lack of motivation from workers
14) Corruption (bribery)
15) Change in project scope
16) Delay in material
6.3.2.2. Categorisation of Risks
Environmental Societal Risks Operational Risks Financial & Political

Risks Risks
Noise pollution Damage to heritage Delay in material Tendering process

sites failure
Vibration Corruption Change in project scope Change in

Government policies
Air pollution Damage to businesses High turnover of employees Inflation

around site
Lack of skilled workers Project going over

budget
Contractors not following Breach of Contract

designed specification
Employment strike
Failure in Quality
Management system
Table 1: Categorisation of Risks
6.4. Risk Assessment
Risk assessment is the process of analysing known risks and prioritising the based on their threat in the
attainment of project goals. During the assessment phase, the project analyses each risk to isolate its cause
and to determine it effects. The project rates the risk in terms of its probability of occurrence and its
severity of impact to cost (i.e. dollars), schedule (i.e. time), and technical performance, as applicable.
The probability of a risk issue is the chance that the risk will materialise as a real project problem. This
probability is expressed in quantitative (in the scale from 1-5 or 1-7) and qualitative terms (high, medium
or low, etc.), with each scale factor corresponds to a measured level. The risk impact is a measure of how
the project is affected if the risk issues materialise.
Overall risk assessment is the product of combining the probability of occurrence with the severity of
impact as follows
6.4.1. Qualitative method risk assessment
All risks are ranked qualitatively at this stage. The format for the assessment is given in the table below:
Probability of occurrence Severity of impact Overall project risk
High High
High Medium High
Medium High
High Low
Low High Medium
Medium Medium
Medium Low
Low Medium Low
Low Low
Table 2: Risk Assessment
All risks identified above will be carefully assessed and their respective recommendations will be made
available to appropriate personnel in the Management Team in a separate report.
6. BENEFIT/COST ANALYSIS
Total carparks 1,200.00
Time Cos t
1 hour $ 1.50
2 hours $ 3.00
3 hours $ 4.50
4 hours $ 6.00
8 hours $ 12.00
Fine $ 40.00
6.1. Project Analysis
6.1.1. Project Expenditure

OPEX
Carpark operating cost $ 50,000.00
Salary $ 25,000.00
Overheads $ 10,000.00
Initial working capital $ 50,000.00
Total OPEX Year 1 $ 135,000.00
Total OPEX in consecutive Years $ 85,000.00
CAPEX
Area of parking (m2) $ 33,000.00
Construction cost per m2 $ 600.00
Total Construction cost $ 19,800,000.00
Professional fees (%) 10.00
Professional fees ($) $ 1,980,000.00
Research and Development $ 600,000.00
Other costs
Consents $ 100,000.00
Legal Cost $ 100,000.00
Development Levy $ 300,000.00
Total CAPEX $ 22,880,000.00
Depreciation $ 1,144,000.00
Major refurb in Yr 10 $ 1,000,000.00
Inflation rate 0.035

Cost of Debt 0.09
Tax rate 0.30
Return rate on Equity 0.20
Debt Funding 0.80
GST 0.10
Total Debt (D) $ 18,304,000.00

Total Equity (E) $ 4,576,000.00
6.1.2. Expected Income from Project Operation
Term-40 weeks
Profile Day Evening Night
Time during the week Weekday Weekend Weekday Weekend Weekday Weekend
Percentage 75 40 60 30 5 0
Number of occupancy in 1 hour 900.00 480.00 720.00 360.00 60.00 -
Percentage of defaulters 2 2 2 2 2 2
Number of defaulters in 1 hour 18.00 9.60 14.40 7.20 1.20 -
Percentage of defaulters will pay fines 10.00 10.00 10.00 10.00 10.00 10.00
Number of defaulters will pay fines in 1 day 14.40 7.68 5.76 2.88 1.44 -
Amount of fines in 1 day 576.00 307.20 230.40 115.20 57.60 -
Yearly income from fines 115,200.00 24,576.00 46,080.00 9,216.00 11,520.00 -
Total income from fines 206,592.00
Number of paid occupants in 1 hour 882.00 470.40 705.60 352.80 58.80 -

Number of paid occupants in a day 7,056.00 3,763.20 2,822.40 1,411.20 705.60 -
Usage profile percentage-hours

1 10 10 30 30 25 25
2 40 40 40 40 25 25
3 40 40 20 20 25 25
4 10 10 10 10 25 25
Distribution-hour
1 705.60 376.32 846.72 423.36 176.40 -
2 2,822.40 1,505.28 1,128.96 564.48 176.40 -
3 2,822.40 1,505.28 564.48 282.24 176.40 -
4 705.60 376.32 282.24 141.12 176.40 -
Total 7,056.00 3,763.20 2,822.40 1,411.20 705.60 -
Income from carpark activity

Time-hour $ $ $ $ $ $
1 $ 1,058.40 $ 564.48 $ 1,270.08 $ 635.04 $ 264.60 $-
2 $ 8,467.20 $ 4,515.84 $ 3,386.88 $1,693.44 $ 529.20 $-
3 $12,700.80 $ 6,773.76 $ 2,540.16 $1,270.08 $ 793.80 $-
4 $ 4,233.60 $ 2,257.92 $ 1,693.44 $ 846.72 $ 1,058.40 $-
Yearly Sub-total $ 5,292,000.00 $ 1,128,960.00 $1,778,112.00 $ 355,622.40 $ 529,200.00 $ -
Yearly Income-Academic term $ 9,290,486.40

Holiday-12 weeks
Percentage 60 30 40 20 0 0
Number of occupancy in 1 hour 720.00 360.00 480.00 240.00 - -
Percentage of defaulters 2.00 2.00 2.00 2.00 2.00 2.00

Number of defaulters in 1 hour 14.40 7.20 9.60 4.80 - -
Number of defaulters will pay fines in 1 day 11.52 5.76 3.84 1.92 - -
Amount of fines in 1 day 460.80 230.40 153.60 76.80 - -
Yearly income from fines 27,648.00 5,529.60 9,216.00 1,843.20 - -
Number of paid occupants in 1 hour 705.60 352.80 470.40 235.20 - -

Number of paid occupants in a day 5,644.80 2,822.40 1,881.60 940.80 - -

1 10 10 30 30 25 25
2 40 40 40 40 25 25
3 40 40 20 20 25 25
4 10 10 10 10 25 25
Distribution-hour
1 564.48 282.24 564.48 282.24 - -
2 2,257.92 1,128.96 752.64 376.32 - -
3 2,257.92 1,128.96 376.32 188.16 - -
4 564.48 282.24 188.16 94.08 - -
Total 5,644.80 2,822.40 1,881.60 940.80 - -

Time-hour $ $ $ $ $ $
1 $ 846.72 $ 423.36 $ 846.72 $ 423.36 $ - $-
2 $ 6,773.76 $ 3,386.88 $ 2,257.92 $1,128.96 $ - $-
3 $ 10,160.64 $ 5,080.32 $ 1,693.44 $ 846.72 $ - $-
4 $ 3,386.88 $ 1,693.44 $ 1,128.96 $ 564.48 $ - $-
Yearly Sub-total $ 1,270,080.00 $ 254,016.00 $ 355,622.40 $ 71,124.48 $ - $-
Yearly Income-Academic Holiday $ 1,995,079.68
Total Yearly Income $ 11,285,566.08

6.1.3. Income and Cash Flow Statements
6.1.3.1. NPV Summary
Year Cash flow DR=12.54% PV

- -$ 22,880,000.00 1 -$ 22,880,000.00
1.00 $ - 0.8885730 $ -
2.00 $ 5,494,224.15 0.7895619 $ 4,338,030.01
3.00 $ 5,518,724.15 0.7015833 $ 3,871,844.92
4.00 $ 5,518,724.15 0.6234080 $ 3,440,416.67
5.00 $ 5,518,724.15 0.5539435 $ 3,057,061.20
6.00 $ 5,518,724.15 0.4922192 $ 2,716,421.89
7.00 $ 5,518,724.15 0.4373727 $ 2,413,739.02
8.00 $ 5,518,724.15 0.3886375 $ 2,144,783.21
9.00 $ 5,518,724.15 0.3453328 $ 1,905,796.34
10.00 $ 4,518,724.15 0.3068534 $ 1,386,585.72
11.00 $ 7,393,605.93 0.2726616 $ 2,015,952.43
12.00 $ 7,393,605.93 0.2422797 $ 1,791,320.80
13.00 $ 7,393,605.93 0.2152832 $ 1,591,719.21
14.00 $ 7,393,605.93 0.1912948 $ 1,414,358.64
15.00 $ 7,393,605.93 0.1699794 $ 1,256,760.83
16.00 $ 7,393,605.93 0.1510391 $ 1,116,723.68
17.00 $ 7,393,605.93 0.1342093 $ 992,290.46
18.00 $ 7,393,605.93 0.1192547 $ 881,722.46
19.00 $ 7,393,605.93 0.1059665 $ 783,474.73
20.00 $ 7,393,605.93 0.0941590 $ 696,174.45
Total NPV $ 14,935,176.69

6.1.3.2. Income Statement and Cash Flow Statement
Income Statement
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Revenue - 11,285,566.08 11,285,566.08 11,285,566.08 11,285,566.08 11,285,566.08 11,285,566.08 11,285,566.08 11,285,566.08 11,285,566.08
GST (10%) - 1,128,556.61 1,128,556.61 1,128,556.61 1,128,556.61 1,128,556.61 1,128,556.61 1,128,556.61 1,128,556.61 1,128,556.61
Operating Cost - 135,000.00 85,000.00 85,000.00 85,000.00 85,000.00 85,000.00 85,000.00 85,000.00 85,000.00
Rent - 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
Gross profit - 10,022,008.47 10,072,008.47 10,072,008.47 10,072,008.47 10,072,008.47 10,072,008.47 10,072,008.47 10,072,008.47 10,072,008.47
Depreciation - 1,144,000.00 1,144,000.00 1,144,000.00 1,144,000.00 1,144,000.00 1,144,000.00 1,144,000.00 1,144,000.00 1,144,000.00
PBIT - 8,878,008.47 8,928,008.47 8,928,008.47 8,928,008.47 8,928,008.47 8,928,008.47 8,928,008.47 8,928,008.47 8,928,008.47
Interest & Loan Repayment (30%) - 2,663,402.54 2,678,402.54 2,678,402.54 2,678,402.54 2,678,402.54 2,678,402.54 2,678,402.54 2,678,402.54 2,678,402.54
Profit before Tax - 6,214,605.93 6,249,605.93 6,249,605.93 6,249,605.93 6,249,605.93 6,249,605.93 6,249,605.93 6,249,605.93 6,249,605.93
Tax (30%) - 1,864,381.78 1,874,881.78 1,874,881.78 1,874,881.78 1,874,881.78 1,874,881.78 1,874,881.78 1,874,881.78 1,874,881.78
Profit after Tax - 4,350,224.15 4,374,724.15 4,374,724.15 4,374,724.15 4,374,724.15 4,374,724.15 4,374,724.15 4,374,724.15 4,374,724.15
Retain Profit - 4,350,224.15 4,374,724.15 4,374,724.15 4,374,724.15 4,374,724.15 4,374,724.15 4,374,724.15 4,374,724.15 4,374,724.15
Cash flow Statement
Capital Outlay 22,880,000.00
Cash from sales of asset - - - - - - - - -
Gross profit - 10,022,008.47 10,072,008.47 10,072,008.47 10,072,008.47 10,072,008.47 10,072,008.47 10,072,008.47 10,072,008.47
Interest paid - 2,663,402.54 2,678,402.54 2,678,402.54 2,678,402.54 2,678,402.54 2,678,402.54 2,678,402.54 2,678,402.54
Tax - 1,864,381.78 1,874,881.78 1,874,881.78 1,874,881.78 1,874,881.78 1,874,881.78 1,874,881.78 1,874,881.78
Net Cash Flow - 22,880,000.00 - 5,494,224.15 5,518,724.15 5,518,724.15 5,518,724.15 5,518,724.15 5,518,724.15 5,518,724.15 5,518,724.15
11,285,566.08 11,285,566.08 11,285,566.08 11,285,566.08 11,285,566.08 11,285,566.08 11,285,566.08 11,285,566.08 11,285,566.08 11,285,566.08
1,128,556.61 1,128,556.61 1,128,556.61 1,128,556.61 1,128,556.61 1,128,556.61 1,128,556.61 1,128,556.61 1,128,556.61 1,128,556.61
85,000.00 85,000.00 85,000.00 85,000.00 85,000.00 85,000.00 85,000.00 85,000.00 85,000.00 85,000.00
1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
10,072,008.47 10,072,008.47 10,072,008.47 10,072,008.47 10,072,008.47 10,072,008.47 10,072,008.47 10,072,008.47 10,072,008.47 10,072,008.47
1,144,000.00 1,144,000.00 1,144,000.00 1,144,000.00 1,144,000.00 1,144,000.00 1,144,000.00 1,144,000.00 1,144,000.00 1,144,000.00
8,928,008.47 8,928,008.47 8,928,008.47 8,928,008.47 8,928,008.47 8,928,008.47 8,928,008.47 8,928,008.47 8,928,008.47 8,928,008.47
- - - - - - - - - -
8,928,008.47 8,928,008.47 8,928,008.47 8,928,008.47 8,928,008.47 8,928,008.47 8,928,008.47 8,928,008.47 8,928,008.47 8,928,008.47
2,678,402.54 2,678,402.54 2,678,402.54 2,678,402.54 2,678,402.54 2,678,402.54 2,678,402.54 2,678,402.54 2,678,402.54 2,678,402.54
6,249,605.93 6,249,605.93 6,249,605.93 6,249,605.93 6,249,605.93 6,249,605.93 6,249,605.93 6,249,605.93 6,249,605.93 6,249,605.93
6,249,605.93 6,249,605.93 6,249,605.93 6,249,605.93 6,249,605.93 6,249,605.93 6,249,605.93 6,249,605.93 6,249,605.93 6,249,605.93
Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20
1,000,000.00
- - - - - - - - - - 1.00
10,072,008.47 10,072,008.47 10,072,008.47 10,072,008.47 10,072,008.47 10,072,008.47 10,072,008.47 10,072,008.47 10,072,008.47 10,072,008.47 10,072,008.47
2,678,402.54 - - - - - - - - - -
1,874,881.78 2,678,402.54 2,678,402.54 2,678,402.54 2,678,402.54 2,678,402.54 2,678,402.54 2,678,402.54 2,678,402.54 2,678,402.54 2,678,402.54
4,518,724.15 7,393,605.93 7,393,605.93 7,393,605.93 7,393,605.93 7,393,605.93 7,393,605.93 7,393,605.93 7,393,605.93 7,393,605.93 7,393,606.93
Figure 1: NPV of the project
6.1.4. Benefit-Cost Ratio
In order for the project to go ahead, a Feasibility Study commissioned by ACCC has found that the BCR
has to be at least 1.0. This is to ensure that the investment provides the Corporation enough benefits
throughout the economic life of the project.
The following results have been obtained from our analysis:
• Tangible Net Present Value: $14,935,176.69

• Intangible Net Present Value: $8,750,000
• Total Cost of the Project: $22,880,000
It is therefore concluded that the development should be undertaken by ACCC, as it ensures the
Corporation with a decent return.
6.2. Option Analysis
6.2.1. Optimistic Option
6.2.1.1. Underlying Assumptions
The Optimistic Options assesses the effects of all positive contributions from activities taken by the
organisation or from assumptions which will materialise during the life of the project from its conception
to completion.
The following assumptions are made for this option:
• The research which has been undertaken by ACCC is successful and contributes to the reduction
of 2% from the projected construction cost
• All those who default pay their fines in full
• Successful commercialisation of the facility during the academic holiday period and the levels of
occupancy on weekdays and weekends are 100% and 90% respectively
6.2.1.2. Project Expenditure

OPEX
Salary $ 25,000.00
CAPEX
Construction cost $ 19,800,000.00
Construction cost saving (%) 2.00
Amount saved on Construction cost $ 396,000.00
Other costs
Consents $ 100,000.00
Legal Cost $ 100,000.00
Total CAPEX 22,734,000.00
Total Debt (D) $ 18,187,200.00

Total Equity (E) $ 4,546,800.00
6.2.1.3. Expected Income from Project Operation
Term-40 weeks
Percentage 75 40 60 30 5 0
Number of defaulters will pay fines in 1 day 144.00 76.80 57.60 28.80 14.40 -
Amount of fines in 1 day 5,760.00 3,072.00 2,304.00 1,152.00 576.00 -
Yearly income from fines 1,152,000.00 245,760.00 460,800.00 92,160.00 115,200.00 -
Total income from fines 2,065,920.00


1 10 10 30 30 25 25
2 40 40 40 40 25 25
3 40 40 20 20 25 25
4 10 10 10 10 25 25
Distribution-hour
1 705.60 376.32 846.72 423.36 176.40 -
2 2,822.40 1,505.28 1,128.96 564.48 176.40 -
3 2,822.40 1,505.28 564.48 282.24 176.40 -
4 705.60 376.32 282.24 141.12 176.40 -
Total 7,056.00 3,763.20 2,822.40 1,411.20 705.60 -

Time-hour $ $ $ $ $ $
1 $ 1,058.40 $ 564.48 $ 1,270.08 $ 635.04 $ 264.60 -
2 $ 8,467.20 $ 4,515.84 $ 3,386.88 $ 1,693.44 $ 529.20 -
3 $ 12,700.80 $ 6,773.76 $ 2,540.16 $ 1,270.08 $ 793.80 -
4 $ 4,233.60 $ 2,257.92 $ 1,693.44 $ 846.72 $ 1,058.40 -
Yearly Sub-total $ 5,292,000.00 $1,128,960.00 $1,778,112.00 $ 355,622.40 $ 529,200.00 $ -

Holiday-12 weeks
Percentage 100 90 40 20 0 0
Number of occupancy in 1 hour 1,200.00 1,080.00 480.00 240.00 - -

Number of defaulters will pay fines in 1 day 192.00 172.80 38.40 19.20 - -
Amount of fines in 1 day 7,680.00 6,912.00 1,536.00 768.00 - -
Yearly income from fines 460,800.00 165,888.00 92,160.00 18,432.00 - -
Number of paid occupants in 1 hour 1,176.00 1,058.40 470.40 235.20 - -


1 10 10 30 30 25 25
2 40 40 40 40 25 25
3 40 40 20 20 25 25
4 10 10 10 10 25 25
Distribution-hour
1 940.80 846.72 564.48 282.24 - -
2 3,763.20 3,386.88 752.64 376.32 - -
3 3,763.20 3,386.88 376.32 188.16 - -
4 940.80 846.72 188.16 94.08 - -
Total 9,408.00 8,467.20 1,881.60 940.80 - -

Time-hour $ $ $ $ $ $
1 $ 1,411.20 $ 1,270.08 $ 846.72 $ 423.36 $ - $ -
2 $ 11,289.60 $10,160.64 $ 2,257.92 $ 1,128.96 $ - $ -
3 $ 16,934.40 $15,240.96 $ 1,693.44 $ 846.72 $ - $ -
4 $ 5,644.80 $ 5,080.32 $ 1,128.96 $ 564.48 $ - $ -
Yearly Sub-total $ 2,116,800.00 $ 762,048.00 $ 355,622.40 $ 71,124.48 $ - $ -

6.2.1.4. Income and Cash Flow Statement
6.2.1.4.1. NPV Summary

- -$ 22,734,000.00 1 -$ 22,734,000.00
1.00 - 0.8885730 -
2.00 $ 7,213,542.48 0.7895619 5,695,538.24
3.00 $ 7,238,042.48 0.7015833 5,078,090.02
4.00 $ 7,238,042.48 0.6234080 4,512,253.44
5.00 $ 7,238,042.48 0.5539435 4,009,466.36
6.00 $ 7,238,042.48 0.4922192 3,562,703.36
7.00 $ 7,238,042.48 0.4373727 3,165,721.84
8.00 $ 7,238,042.48 0.3886375 2,812,974.80
9.00 $ 9,852,903.55 0.3453328 3,402,530.56
10.00 $ 8,852,903.55 0.3068534 2,716,543.25
11.00 $ 9,852,903.55 0.2726616 2,686,508.46
12.00 $ 8,813,615.23 0.2422797 2,135,360.26
13.00 $ 8,813,615.23 0.2152832 1,897,423.37
14.00 $ 8,813,615.23 0.1912948 1,685,999.09
15.00 $ 8,813,615.23 0.1699794 1,498,133.19
16.00 $ 8,813,615.23 0.1510391 1,331,200.63
17.00 $ 8,813,615.23 0.1342093 1,182,868.87
18.00 $ 8,813,615.23 0.1192547 1,051,065.28
19.00 $ 8,813,615.23 0.1059665 933,948.18
20.00 $ 8,813,615.23 0.09 829,881.09
Total NPV $ 27,454,210.28

6.2.1.4.2. Income Statement and Cash Flow Statement
Income Statement
Revenue - 15,192,689.28 15,192,689.28 15,192,689.28 15,192,689.28 15,192,689.28 15,192,689.28 15,192,689.28 15,192,689.28 15,192,689.28
GST (10%) - 1,519,268.93 1,519,268.93 1,519,268.93 1,519,268.93 1,519,268.93 1,519,268.93 1,519,268.93 1,519,268.93 1,519,268.93
Operating Cost - 135,000.00 85,000.00 85,000.00 85,000.00 85,000.00 85,000.00 85,000.00 85,000.00 85,000.00
Rent - 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
Gross profit - 13,538,419.35 13,588,419.35 13,588,419.35 13,588,419.35 13,588,419.35 13,588,419.35 13,588,419.35 13,588,419.35 13,588,419.35
Depreciation - 1,136,700.00 1,136,700.00 1,136,700.00 1,136,700.00 1,136,700.00 1,136,700.00 1,136,700.00 1,136,700.00 1,136,700.00
PBIT - 12,401,719.35 12,451,719.35 12,451,719.35 12,451,719.35 12,451,719.35 12,451,719.35 12,451,719.35 12,451,719.35 12,451,719.35
Interest & Loan Repayment (30%) - 3,720,515.81 3,735,515.81 3,735,515.81 3,735,515.81 3,735,515.81 3,735,515.81 3,735,515.81 - -
Tax (30%) - 2,604,361.06 2,614,861.06 2,614,861.06 2,614,861.06 2,614,861.06 2,614,861.06 2,614,861.06 3,735,515.81 3,735,515.81
Profit after Tax - 6,076,842.48 6,101,342.48 6,101,342.48 6,101,342.48 6,101,342.48 6,101,342.48 6,101,342.48 8,716,203.55 8,716,203.55
Retain Profit - 6,076,842.48 6,101,342.48 6,101,342.48 6,101,342.48 6,101,342.48 6,101,342.48 6,101,342.48 8,716,203.55 8,716,203.55
Cash flow Statement
Gross profit - 13,538,419.35 13,588,419.35 13,588,419.35 13,588,419.35 13,588,419.35 13,588,419.35 13,588,419.35 13,588,419.35
Interest paid - 3,720,515.81 3,735,515.81 3,735,515.81 3,735,515.81 3,735,515.81 3,735,515.81 3,735,515.81 -
Tax - 2,604,361.06 2,614,861.06 2,614,861.06 2,614,861.06 2,614,861.06 2,614,861.06 2,614,861.06 3,735,515.81
Net Cash Flow - 22,734,000.00 - 7,213,542.48 7,238,042.48 7,238,042.48 7,238,042.48 7,238,042.48 7,238,042.48 7,238,042.48 9,852,903.55
15,192,689.28 15,192,689.28 15,192,689.28 15,192,689.28 15,192,689.28 15,192,689.28 15,192,689.28 15,192,689.28 15,192,689.28 15,192,689.28
1,519,268.93 1,519,268.93 1,519,268.93 1,519,268.93 1,519,268.93 1,519,268.93 1,519,268.93 1,519,268.93 1,519,268.93 1,519,268.93
85,000.00 85,000.00 85,000.00 85,000.00 85,000.00 85,000.00 85,000.00 85,000.00 85,000.00 85,000.00
1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
13,588,419.35 13,588,419.35 13,588,419.35 13,588,419.35 13,588,419.35 13,588,419.35 13,588,419.35 13,588,419.35 13,588,419.35 13,588,419.35
1,136,700.00 1,136,700.00 1,136,700.00 1,136,700.00 1,136,700.00 1,136,700.00 1,136,700.00 1,136,700.00 1,136,700.00 1,136,700.00
12,451,719.35 12,451,719.35 12,451,719.35 12,451,719.35 12,451,719.35 12,451,719.35 12,451,719.35 12,451,719.35 12,451,719.35 12,451,719.35
- - - - - - - - - -
12,451,719.35 12,451,719.35 12,451,719.35 12,451,719.35 12,451,719.35 12,451,719.35 12,451,719.35 12,451,719.35 12,451,719.35 12,451,719.35
3,735,515.81 3,735,515.81 3,735,515.81 3,735,515.81 3,735,515.81 3,735,515.81 3,735,515.81 3,735,515.81 3,735,515.81 3,735,515.81
8,716,203.55 8,716,203.55 8,716,203.55 8,716,203.55 8,716,203.55 8,716,203.55 8,716,203.55 8,716,203.55 8,716,203.55 8,716,203.55
8,716,203.55 8,716,203.55 8,716,203.55 8,716,203.55 8,716,203.55 8,716,203.55 8,716,203.55 8,716,203.55 8,716,203.55 8,716,203.55
1,000,000.00
- - - - - - - - - - 1.00
13,588,419.35 13,588,419.35 13,588,419.35 13,588,419.35 13,588,419.35 13,588,419.35 13,588,419.35 13,588,419.35 13,588,419.35 13,588,419.35 13,588,419.35
- - - - - - - - - - -
3,735,515.81 3,735,515.81 3,735,515.81 3,735,515.81 3,735,515.81 3,735,515.81 3,735,515.81 3,735,515.81 3,735,515.81 3,735,515.81 3,735,515.81
8,852,903.55 9,852,903.55 9,852,903.55 9,852,903.55 9,852,903.55 9,852,903.55 9,852,903.55 9,852,903.55 9,852,903.55 9,852,903.55 9,852,904.55
Figure 1: NPV of Optimistic Option
6.2.1.5. Benefit-Cost Ratio


It is therefore concluded that the development should be undertaken by ACCC, as it ensures the
Corporation with a decent return.
6.2.2. Pessimistic Option
6.2.2.1. Underlying Assumptions

The Pessimistic Options assesses the effects of all negative contributions from activities taken by the
organisation or from assumptions which may materialise during the life of the project from its conception
to completion.
The following assumptions are made for this option:
• The research which has been undertaken by ACCC is successful but does not contribute to the
any reduction from the projected construction cost
• There is an increase in number of defaulters (from 2 % to 5%). Plus all those who default will not
pay their fines
• No commercialisation of the facility during the academic holiday period and the levels of
occupancy on weekdays and weekends remain the same
6.2.2.2. Project Expenditure
OPEX
Salary $ 25,000.00
CAPEX
Construction cost $ 19,800,000.00
Other costs
Consents $ 100,000.00
Legal Cost $ 100,000.00
Total CAPEX 23,130,000.00
Total Debt (D) $ 18,504,000.00

Total Equity (E) $ 4,626,000.00
6.2.2.3. Expected Income from Project Operation
Term-40 weeks
Percentage 75 40 60 30 5 0
Percentage of defaulters will pay fines - - - - - -
Number of defaulters will pay fines in 1 day - - - - - -
Amount of fines in 1 day - - - - - -
Yearly income from fines - - - - - -
Total income from fines -


1 10 10 30 30 25 25
2 40 40 40 40 25 25
3 40 40 20 20 25 25
4 10 10 10 10 25 25
Distribution-hour
1 684.00 364.80 820.80 410.40 171.00 -
2 2,736.00 1,459.20 1,094.40 547.20 171.00 -
3 2,736.00 1,459.20 547.20 273.60 171.00 -
4 684.00 364.80 273.60 136.80 171.00 -
Total 6,840.00 3,648.00 2,736.00 1,368.00 684.00 -

Time-hour $ $ $ $ $ $
1 $ 1,026.00 $ 547.20 $ 1,231.20 $ 615.60 $ 256.50 $ -
2 $ 8,208.00 $ 4,377.60 $ 3,283.20 $ 1,641.60 $ 513.00 $ -
3 $ 12,312.00 $ 6,566.40 $ 2,462.40 $ 1,231.20 $ 769.50 $ -
4 $ 4,104.00 $ 2,188.80 $ 1,641.60 $ 820.80 $ 1,026.00 $ -
Yearly Sub-total $ 5,130,000.00 $ 1,094,400.00 $ 1,723,680.00 $ 344,736.00 $ 513,000.00 $ -

Holiday-12 weeks
Percentage 60 30 40 20 0 0
Number of occupancy in 1 hour 720.00 360.00 480.00 240.00 - -

Percentage of defaulters will pay fines - - - - - -
Number of defaulters will pay fines in 1 day - - - - - -
Amount of fines in 1 day - - - - - -
Yearly income from fines - - - - - -
Total income from fines -
Number of paid occupants in 1 hour 684.00 342.00 456.00 228.00 - -


1 10 10 30 30 25 25
2 40 40 40 40 25 25
3 40 40 20 20 25 25
4 10 10 10 10 25 25
Distribution-hour
1 547.20 273.60 547.20 273.60 - -
2 2,188.80 1,094.40 729.60 364.80 - -
3 2,188.80 1,094.40 364.80 182.40 - -
4 547.20 273.60 182.40 91.20 - -
Total 5,472.00 2,736.00 1,824.00 912.00 - -

Time-hour $ $ $ $ $ $
1 $ 820.80 $ 410.40 $ 820.80 $ 410.40 $ - $-
2 $ 6,566.40 $ 3,283.20 $ 2,188.80 $ 1,094.40 $ - $-
3 $ 9,849.60 $ 4,924.80 $ 1,641.60 $ 820.80 $ - $-
4 $ 3,283.20 $ 1,641.60 $ 1,094.40 $ 547.20 $ - $-
Yearly Sub-total $ 1,231,200.00 $ 246,240.00 $ 344,736.00 $ 68,947.20 $ - $ -

6.2.2.4. Income and Cash Flow Statements
6.2.2.4.1. NPV Summary

- -$ 23,130,000.00 1 -$ 23,130,000.00
1.00 - 0.8885730 -
2.00 $ 5,241,014.70 0.7895619 4,138,105.47
3.00 $ 5,265,514.70 0.7015833 3,694,197.39
4.00 $ 5,265,514.70 0.6234080 3,282,563.88
5.00 $ 5,265,514.70 0.5539435 2,916,797.47
6.00 $ 5,265,514.70 0.4922192 2,591,787.34
7.00 $ 5,265,514.70 0.4373727 2,302,992.13
8.00 $ 5,265,514.70 0.3886375 2,046,376.51
9.00 $ 5,265,514.70 0.3453328 1,818,354.82
10.00 $ 4,265,514.70 0.3068534 1,308,887.54
11.00 $ 5,265,514.70 0.2726616 1,435,703.67
12.00 $ 5,265,514.70 0.2422797 1,275,727.45
13.00 $ 5,265,514.70 0.2152832 1,133,576.90
14.00 $ 7,026,521.00 0.1912948 1,344,137.19
15.00 $ 7,026,521.00 0.1699794 1,194,363.95
16.00 $ 7,026,521.00 0.1510391 1,061,279.50
17.00 $ 7,026,521.00 0.1342093 943,024.26
18.00 $ 7,026,521.00 0.1192547 837,945.85
19.00 $ 7,026,521.00 0.1059665 744,576.02
20.00 $ 7,026,521.00 0.09 661,610.11
Total NPV $ 11,602,007.45

6.2.2.4.2. Income Statement and Cash Flow Statement
Income Statement
Revenue - 10,696,939.20 10,696,939.20 10,696,939.20 10,696,939.20 10,696,939.20 10,696,939.20 10,696,939.20 10,696,939.20 10,696,939.20
GST (10%) - 1,069,693.92 1,069,693.92 1,069,693.92 1,069,693.92 1,069,693.92 1,069,693.92 1,069,693.92 1,069,693.92 1,069,693.92
Operating Cost - 135,000.00 85,000.00 85,000.00 85,000.00 85,000.00 85,000.00 85,000.00 85,000.00 85,000.00
Rent - 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
Gross profit - 9,492,244.28 9,542,244.28 9,542,244.28 9,542,244.28 9,542,244.28 9,542,244.28 9,542,244.28 9,542,244.28 9,542,244.28
Depreciation - 1,156,500.00 1,156,500.00 1,156,500.00 1,156,500.00 1,156,500.00 1,156,500.00 1,156,500.00 1,156,500.00 1,156,500.00
PBIT - 8,335,744.28 8,385,744.28 8,385,744.28 8,385,744.28 8,385,744.28 8,385,744.28 8,385,744.28 8,385,744.28 8,385,744.28
Interest & Loan Repayment (30%) - 2,500,723.28 2,515,723.28 2,515,723.28 2,515,723.28 2,515,723.28 2,515,723.28 2,515,723.28 2,515,723.28 2,515,723.28
Tax (30%) - 1,750,506.30 1,761,006.30 1,761,006.30 1,761,006.30 1,761,006.30 1,761,006.30 1,761,006.30 1,761,006.30 1,761,006.30
Profit after Tax - 4,084,514.70 4,109,014.70 4,109,014.70 4,109,014.70 4,109,014.70 4,109,014.70 4,109,014.70 4,109,014.70 4,109,014.70
Retain Profit - 4,084,514.70 4,109,014.70 4,109,014.70 4,109,014.70 4,109,014.70 4,109,014.70 4,109,014.70 4,109,014.70 4,109,014.70
Cash flow Statement
Gross profit - 9,492,244.28 9,542,244.28 9,542,244.28 9,542,244.28 9,542,244.28 9,542,244.28 9,542,244.28 9,542,244.28
Interest paid - 2,500,723.28 2,515,723.28 2,515,723.28 2,515,723.28 2,515,723.28 2,515,723.28 2,515,723.28 2,515,723.28
Tax - 1,750,506.30 1,761,006.30 1,761,006.30 1,761,006.30 1,761,006.30 1,761,006.30 1,761,006.30 1,761,006.30
Net Cash Flow - 23,130,000.00 - 5,241,014.70 5,265,514.70 5,265,514.70 5,265,514.70 5,265,514.70 5,265,514.70 5,265,514.70 5,265,514.70
10,696,939.20 10,696,939.20 10,696,939.20 10,696,939.20 10,696,939.20 10,696,939.20 10,696,939.20 10,696,939.20 10,696,939.20 10,696,939.20
1,069,693.92 1,069,693.92 1,069,693.92 1,069,693.92 1,069,693.92 1,069,693.92 1,069,693.92 1,069,693.92 1,069,693.92 1,069,693.92
85,000.00 85,000.00 85,000.00 85,000.00 85,000.00 85,000.00 85,000.00 85,000.00 85,000.00 85,000.00
1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
9,542,244.28 9,542,244.28 9,542,244.28 9,542,244.28 9,542,244.28 9,542,244.28 9,542,244.28 9,542,244.28 9,542,244.28 9,542,244.28
1,156,500.00 1,156,500.00 1,156,500.00 1,156,500.00 1,156,500.00 1,156,500.00 1,156,500.00 1,156,500.00 1,156,500.00 1,156,500.00
8,385,744.28 8,385,744.28 8,385,744.28 8,385,744.28 8,385,744.28 8,385,744.28 8,385,744.28 8,385,744.28 8,385,744.28 8,385,744.28
2,515,723.28 2,515,723.28 2,515,723.28 - - - - - - -
5,870,021.00 5,870,021.00 5,870,021.00 8,385,744.28 8,385,744.28 8,385,744.28 8,385,744.28 8,385,744.28 8,385,744.28 8,385,744.28
1,761,006.30 1,761,006.30 1,761,006.30 2,515,723.28 2,515,723.28 2,515,723.28 2,515,723.28 2,515,723.28 2,515,723.28 2,515,723.28
4,109,014.70 4,109,014.70 4,109,014.70 5,870,021.00 5,870,021.00 5,870,021.00 5,870,021.00 5,870,021.00 5,870,021.00 5,870,021.00
4,109,014.70 4,109,014.70 4,109,014.70 5,870,021.00 5,870,021.00 5,870,021.00 5,870,021.00 5,870,021.00 5,870,021.00 5,870,021.00
1,000,000.00
- - - - - - - - - - 1.00
9,542,244.28 9,542,244.28 9,542,244.28 9,542,244.28 9,542,244.28 9,542,244.28 9,542,244.28 9,542,244.28 9,542,244.28 9,542,244.28 9,542,244.28
2,515,723.28 2,515,723.28 2,515,723.28 2,515,723.28 - - - - - - -
1,761,006.30 1,761,006.30 1,761,006.30 1,761,006.30 2,515,723.28 2,515,723.28 2,515,723.28 2,515,723.28 2,515,723.28 2,515,723.28 2,515,723.28
4,265,514.70 5,265,514.70 5,265,514.70 5,265,514.70 7,026,521.00 7,026,521.00 7,026,521.00 7,026,521.00 7,026,521.00 7,026,521.00 7,026,522.00
Figure 1: NPV of Pessimistic Option
6.2.2.5. Benefit-Cost Ratio


It is therefore concluded that the development should not be undertaken by ACCC, as the BCR is below
the target BCR set by the Corporation.
7. IMPLEMENTATION STRATEGY
7.1. Purpose of the Implementation Plan
The Implementation Plan establishes ACCC’s requirements and standards regarding the procedures
undertaken by all personnel during the development. It also sets out the hierarchy of project governance
for this project.
All ACCC personnel are expected to follow the standard set in this Implementation Plan to achieve the
desired organisational objectives in term of Time-Cost-Quality throughout the life of the project.
7.2. Implementation Plan
A number of local staff has been employed on a full time basis during the construction of the project aside
from ACCC personnel, most of whom come from New Zealand. It is an essential part of the project, as
ACCC has realised that local knowledge of these individuals in operation, resources and local legal
requirements is a valuable asset.
7.2.1. Project personnel
The list below outlines the project personnel in the development and their respective position in the
Management team:
• Mr. Van Tran-Project Manager

• Mr. Ivan Neeyo-Quantity Surveyor
• Mr. Aman Kumar-Project Risk Manager
• Mr. Jim Stewards-Construction Manager
• Mr. Steven John-Operations Manager
• Mr. John Doe-Facility Manager
7.2.2. Training
Regular training sessions and meetings will be carried out during the construction phase of the
development. This will also continue during the operation phase with appropriate modifications to meet
the requirements of the circumstances.
7.3. Implementation Timeline
The Implementation Plan will be undertaken in a timely manner according to the project timeline as
outlined below:
ID Task Name Duration Start Finish Aug '09 5 Oct '09 16 Nov '09 28 Dec '09 8 Feb '10 22 Mar '10 3 May '10 14 Jun '10 26 Jul '10 6 Sep '10 18 Oct '10
S W S T M F T S W S T M F T S W S T M F T S W S T
1 Carpark Development 280 days Mon 12/10/09 Fri 5/11/10
2 Procurement 2 mons Mon 12/10/09 Fri 4/12/09
3 Site set-up 4 wks Mon 12/10/09 Fri 6/11/09
4 Piling 3 mons Mon 9/11/09 Fri 29/01/10
5 Foundation 2 mons Mon 1/02/10 Fri 26/03/10
6 Superstructure 140 days Mon 29/03/10 Fri 8/10/10
7 Phase 1 2 mons Mon 29/03/10 Fri 21/05/10
8 Phase 2 2.5 mons Mon 24/05/10 Fri 30/07/10
9 Phase 3 2.5 mons Mon 2/08/10 Fri 8/10/10
10 Commisioning 20 days Mon 11/10/10 Fri 5/11/10
Task Milestone External Tasks

Project: Project1
Split Summary External Milestone
Date: Mon 12/10/09
Progress Project Summary Deadline
Page 1
7.4. Project Structure and Reporting
The Project Manager, Mr. Van Tran, will overlook the project during the life of the development. He
will be assisted with other authorised members in the Management Team as outlined above. This
structure is to ensure a robust organisational information governance assurance framework, including:
• Ensuring the organisation has a robust management and accountability framework in place
for all aspects of information governance.
• Ensuring that organisation has a Guardian and an appropriately resourced function to provide
confidentiality and expertise.
• Ensuring that the organisation has appointed (or has access to) an appropriated trained and
supported Managers.
• Ensuring the organisation undertakes an annual information governance self-assessment.
Regular reporting will be carried out on a monthly basis on the Senior Management level and on a
fortnight basis on a lower Management level. This is to ensure problems to be identified early and
improvement of communication among personnel at different levels in the organisation.
8. CONCLUSION AND RECOMMENDATION
This report has shown careful analysis of the developments of the carpark project undertaken by
ACCC at Griffith University, Southbank Campus in Brisbane. It has also explored different options
which can be taken by the Corporation in order to maximise the income for the organisation as well as
to establishing its presence in Australia, particularly in one of the fastest growing regions in the
country such as the Southeast Queensland region.
A structured approach in management of the project throughout its whole economic life has also been
set up to ensure the financial and operational objectives of the Corporation are met during the
specified concession period.
Based on careful financial analysis of the project, the Corporation can make a profitable investment in
this development. There are also many intangible benefits which the Corporation can achieve in this
project such as a well-established reputation and a valuable experience in Australia.
The author therefore recommends ACCC to undertake the project. However, careful planning needs to
be carried out to ensure a security system is developed during the construction to minimise the
number of defaulters, as they can have a severe impact on the income of the Corporation.
9. BASIS OF ESTIMATE
The following formulations have been used in this report to derive appropriate calculations which
form the basis for subsequence analysis.
9.1. CAPEX
=$19,800,000
9.2. OPEX
9.3. DISCOUNT RATE
9.4. INCOME CALCULATION
(NH)
Note: Number of hours depends on the time during the day:
• Day time: Number of hours=8 hours
• Evening: Number of hours=4 hours
• Night: Number of hours=12 hours
*
Note: * shows:
• Number of week: 40 during term time and 12 during holiday
• Number of days are 5 and 2 respectively which represent weekdays and weekend time and
• is different times in a day as before.
9.5. INCOME AND CASH FLOW CALCULATION
These calculations are as per other assignments and worksheets with only a minor change in GST and
PBIT calculations.
and
For Cash Flow Calculation, there is a minor change at year 10 when there is a cost of refurbishment.
Therefore the Present value in Year 10 is:

Business Case For A Carpark Development

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Table of Contents

Figure 1:NPV Chart of Option One ........................................................................................................ 9

Table 1: Categorisation of Risks ........................................................................................................... 14

• Corporation’s long term strategic goals

• Letters to all potential affected parties

2.1. Project Description

• The main contract between the organisations is the Build-Own-Operate-Transfer contract

2.4. Anticipated Outcome

2.5. Stakeholders and Consultation

The main stakeholders in this project have been identified as follows:

4.1. Definition and Purpose of Strategic Alignment

4.2. Strategic Alignment Perspective

4.3. Organisational Strategic Alignment

4.3.1. Strategy Execution

4.3.3. Competitive Potential

4.1. Financial Alternatives

4.1.1. Option One

In order to avoid this effect, an alternative method has been proposed.

4.1.2. Option Two

The following graph shows the effect of this approach:

Figure 2: NPV Chart of Option Two

4.2. Operational Proposal

Figure 3: NPV Chart of Operational Proposal

5.1. Risk Management System Description

The overall process is presented by the following diagram:

Figure 4: Risk Management framework (Victorian Government)

• Establishment of context: Project objectives, such as organisational goals, priorities, can be

6.3. Risk Identification

6.3.1. Risk Management team composition

• Mr. Van Tran-Project Manager

6.3.2.1. List of Risks

Environmental Societal Risks Operational Risks Financial & Political

Noise pollution Damage to heritage Delay in material Tendering process

Vibration Corruption Change in project scope Change in

Air pollution Damage to businesses High turnover of employees Inflation

Lack of skilled workers Project going over

Contractors not following Breach of Contract

Table 1: Categorisation of Risks

6.4. Risk Assessment

Probability of occurrence Severity of impact Overall project risk

6.1. Project Analysis

6.1.1. Project Expenditure

Major refurb in Yr 10 $ 1,000,000.00

Inflation rate 0.035

Total Debt (D) $ 18,304,000.00

Profile Day Evening Night

Number of paid occupants in 1 hour 882.00 470.40 705.60 352.80 58.80 -

Usage profile percentage-hours

Income from carpark activity

Yearly Sub-total $ 5,292,000.00 $ 1,128,960.00 $1,778,112.00 $ 355,622.40 $ 529,200.00 $ -

Yearly Income-Academic term $ 9,290,486.40

Profile Day Evening Night

Percentage of defaulters 2.00 2.00 2.00 2.00 2.00 2.00

Number of paid occupants in 1 hour 705.60 352.80 470.40 235.20 - -

Usage profile percentage-hours

Income from carpark activity

Yearly Sub-total $ 1,270,080.00 $ 254,016.00 $ 355,622.40 $ 71,124.48 $ - $-

Yearly Income-Academic Holiday $ 1,995,079.68

Total Yearly Income $ 11,285,566.08

6.1.3.1. NPV Summary

Year Cash flow DR=12.54% PV

Total NPV $ 14,935,176.69

Cash flow Statement