W4_ANG_Motorcycle Pay-in Installments

Problem Statement

Last weekend when I hang around in shopping mall near to my house in East Jakarta, there was Honda motorcycle exhibition. Without any serious purpose I asked the price of New Honda Vario 125 PGM FI Helm-in Idling Stop type, the Salesman offered me with brochure complete with price list and installment payment scheme from two different leasing companies. Just after that, flash in in my mind that I have a case for my Blog Posting: The price of motorcycle in cash is Rp. 16,450,000.-, if I want to buy in installments, then only allocate down payment no more than three million rupiah and monthly payment about one million rupiah, which leasing company should I choose?

W3.1_AEP_Applying economic evaluation and decision tree analysis to complete the workover job

Problem identification

In order to fulfill gas supply commitment in accordance to sales agreement with PT PLN, a suspended gas exploration well was proposed to be put on production. With a gas price plot in the sales agreement at $6 per MBTU, the gas at amount of 1500 mmscf was expected to be produced in 3 years. Presume an investment cost at $750 thousands and annual operation cost at $700 thousands give the contractor’s take an IRR of 142% and NPV $1.5 million. (PSC gas share for government/contractor is 70/30 from net revenue, while the MARR for oil and gas investment is set 20%).

From the previous measurement, the potential zone called X255 was identified as damaged. Another potential layers were proposed to be perforated. Workover job has brought the new layers as water producing with a very small gas show. As alternative to the bad result, the contractor proposes additional effort to reopen the X255 zone with the probability of 0.6. The cost has already run at S1 million (over 33% from its original AFE $750 thousands) and additional efforts will require another $500-$700 thousands to the budget. Termination of the job will cost a penalty at $500 thousands.

W3_AEP_Applying economic evaluation and decision tree analysis to complete the workover job

Problem Identification

In order to fulfill gas supply commitment in accordance to sales agreement with PT PLN, a suspended gas exploration well was proposed to be put on production. With a gas price plot in the sales agreement at $6 per MBTU, the gas at amount of 1500 mmscf was expected to be produced in 3 years. Presume an investment cost at $750 thousands and annual operation cost at $700 thousands give the contractor’s take an IRR of 142% and NPV $1.5 million. (PSC gas share for government/contractor is 70/30 from net revenue, while the MARR for oil and gas investment is set 20%).

From the previous measurement, the potential zone called X255 was identified as damaged. Another potential layers were proposed to be perforated. Workover job has brought the new layers as water producing with a very small gas show. As alternative to the bad result, the contractor proposes additional effort to reopen the X255 zone with the probability of 0.6. The cost has already run at S1 million (over 33% from its original AFE $750 thousands) and additional efforts will require another $500-$700 thousands to the budget. Termination of the job will cost a penalty at $500 thousands.

W3_HPO_House Rent

1. Problem Statement

I have bought an old house at $ 130,000 which I intended to change it into a dorm house. Because it’s an old house I should renovate it into 10 rooms. I predict the dorm house will have 10 years useful life . The renovation will cost me around 80% of old house acquisition cost. I  predict I can get at least 10% gain/increase per annum conservatively of my land value. I bought the old house by 50% own capital and 50% debt. Tax of my revenues averagely around 30%. How much should I charge minimum per month to each customer at year 1 (one) if I can get at least 10% increase rent each year? Assumption: all rooms will be full occupied at year 1.