Appendix A Example Calculations – Worked Example Calculation of the Relevant Deficit, Statutory Commuted Sum and Asset Payment Please note. This worked example is intended to be an explanation of the methodology that should be used to calculate charges. As such it is an example only and is simplified. Variables Total cost of the mains £98,000 114 Number of properties Average Income per property £141.14 3.25% Interest rate for borrowing Discount rate 3.25% Long term annual inflation 2.00% 12 Number of applicable years The projected future revenue is the number of properties connected in the relevant year (based on a cumulative occupancy), multiplied by the income per property that will be received and increased each year in line with inflation. Calculation of the relevant deficit for the installation of water mains (which is then used in the calculations for the statutory commuted sum and asset payment below). Year Projected Annual Income future borrowing allowance £ relevant Revenue £ cost £ deficit £ 1 1,693.72 9,993.00 1,693.72 8299.28 2 8,869.74 9,993.00 8,869.74 1123.26 3 15,497.15 9,993.00 9,993.00 0.00 4 17,632.83 9,993.00 9,993.00 0.00 17,921.66 9,993.00 9,993.00 0.00 5 6 18,217.03 9,993.00 9,993.00 0.00 7 18,517.62 9,993.00 9,993.00 0.00 8 18,824.75 9,993.00 9,993.00 0.00 9 19,138.41 9,993.00 9,993.00 0.00 10 19,457.30 9,993.00 9,993.00 0.00 11 19,782.73 9,993.00 9,993.00 0.00 12 20,114.69 9,993.00 9,993.00 0.00 Total 195,667.63 119,916.00 110,493.45 9,422.55 Bristol Policy for the Self-Laying of Mains and Services -
Appendix A – Example Calculations Worked Example Calculation of the Relevant Deficit, Statutory Commuted Sum and Asset Payment Please note. This worked example is intended to be an explanation of the methodology that should be used to calculate charges. As such it is an example only and is simplified. Variables Total cost of the mains £98,000 Number of properties 114 Average Income per property £141.14 Interest rate for borrowing 3.25% Discount rate 3.25% Long term annual inflation 2.00% Number of applicable years 12 The projected future revenue is the number of properties connected in the relevant year (based on a cumulative occupancy), multiplied by the income per property that will be received and increased each year in line with inflation. Calculation of the relevant deficit for the installation of water mains (which is then used in the calculations for the statutory commuted sum and asset payment below). Year Projected future Revenue £ Annual borrowing cost £ Income allowance £ relevant deficit £ 1 1,693.72 9,993.00 1,693.72 8299.28 2 8,869.74 9,993.00 8,869.74 1123.26 3 15,497.15 9,993.00 9,993.00 0.00 4 17,632.83 9,993.00 9,993.00 0.00 5 17,921.66 9,993.00 9,993.00 0.00 6 18,217.03 9,993.00 9,993.00 0.00 7 18,517.62 9,993.00 9,993.00 0.00 8 18,824.75 9,993.00 9,993.00 0.00 9 19,138.41 9,993.00 9,993.00 0.00 10 19,457.30 9,993.00 9,993.00 0.00 11 19,782.73 9,993.00 9,993.00 0.00 12 20,114.69 9,993.00 9,993.00 0.00 Total 195,667.63 119,916.00 110,493.45 9,422.55 Bristol Policy for the Self-Laying of Mains and Services -