1. estimate the value of assets2. cost of capital 3. estimate the expected costs 4....

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Finance

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1. estimate the value of assets
2. cost of capital
3. estimate the expected costs
4. estimate the present value of expected costs
5 expected revenue
6. find x so that present value of expected fost is the same as present value of expected revenues
C 000 2016 Estimation of X (price cap annual change) 2017 2018 2019 2020 1,200.0 1,212,0 1,224.1 1,236.4 650.0 625.0 600.0 575.0 450.0 450.0 450.0 450.0 2021 1,248.7 550.0 450.0 7.0% Estimation of expected costs Operating expenses Depreciation Investment Cost of capital Return on capital (9) Value of assets Expected costs Present value of expected costs (2017-2021) 7.0% 7.0% 7.0% 7.0% 11,123.0 10 0.0 12 2021 2018 2020 2017 2019 2016 15 Estimation of expected revenues (contingent on the value of "X") 250.0 0.00% 11.00 257.5 0.00% 11.00 17 18 265.2 0.00% 11.00 273.2 0.00% 11.00 281,4 0.00% 11.00 11.0 Passenger number (million) "X" value Price cap Expected revenue Present value of the expected revenues 0.0 0.00 RRRRRR

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