# Research Project on Ratio Analysis by pxg20930

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```									                                  Financial Analysis of Projects for Henson Civil

Overview and Explanation
Henson Civil currently relies on Gross Margin as the main indicator of financial performance of projects. The
purpose of this analysis is to demonstrate that Gross Margin does NOT accurately measure and report value.
Therefore, a set of "value-based" metrics should compliment the current accounting metrics that are in place.
The use of value-based metrics will provide a more balanced view of financial performance.

Projects that are substantially complete have been evaluated based on their cash flows. Cash flow is the basis
for financial analysis since unlike Gross Margin, cash flow is real and not estimated or forecasted. The following
three metrics have been applied to ascertain if projects are creating value:

1. Net Cash Flow Ratio
The Net Cash Flow Ratio is the Net Cash Flow after expenses per the S11 Project Report in relation to
the project's total cost (amount paid out). For example, a 15% ratio would imply that for every
\$ 1.00 in costs paid out, we were able to pocket \$ 1.15 or 15% of the cost. The higher the
ratio, the more likely the project is to create value. A ratio below the Cost of Capital for
Henson would imply that the project may have negatively impacted shareholder value. This is
the first step for isolating projects that may not create value for Henson.

2. Rate of Return
Rate of Return is the return a project generates in relation to the cost of the investment Henson
makes in the project. The cost of the investment is considered the Cost of Capital.

3. Net Present Value
Net Present Value is the value of the project derived by discounting the cash inflows and
cash outflows at the Cost of Capital.

Why Evaluate Projects Using Cash Flow and not Gross Margin?
The value that a project creates is a function of the project's cash flow. The "Net" Cash Flow or the
residual amount that we can withdraw from the project after we pay for everything is often called
Free Cash Flow. When assigning a value to a company, business unit, or project, Analyst often
discount the Free Cash Flow to arrive at a Net Present Value to approximate the Fair Market
Value of what is being valued. Therefore, the use of "cash flow" type metrics is a preferred
way of ascertaining value-created by a project as opposed to looking at traditional accounting
metrics such as Gross Margin.

Summarize Results
Correlation Graph - Poor Relationship between Gross Margin and Rate of Return
Correlation Graph - Strong Relationship between Net Cash Flow Ratio and Rate of Return
Preliminary Review by Cash Flow Ratio
Summarize Rate of Return Analysis
Summarize Net Present Value Analysis
Detail Analysis for Project:
M5L88100 - Municipal Center East Ohio
S8K11561 - Sewer Plants - ST/ FM / LLM
S8K11562 - Water Pipelines - ST/ FM / LLM
M7L55220 - Office Parks - I 96 Corridor
S8K66100 - Cost Model for DS / LMT
S4C19901 - Stack & Block Model - PNT
M3L17001 - Central Subway - CA ODT
S4B16771 - Security Retrofit - Port Authority
M3C18901 - Design Specs for National Towers
M4B17701 - Security Upgrade - Chemical Facilities
S5M19910 - Research Lab Facility - US / CA / BZ
M7D19880 - School Upgrades - West NP
S5C81050 - Master Facility Plan - DLL SE Region
M9K10601 - Facility Support Team - ILBBC
S6X12677 - Tunnel Design for DOT
S8L72110 - CM Support for Yukon SC
S5L11850 - Surveys - Railroad West Lines
Summarize Results of Analysis
< Current Metrics >
Cost to Date
In House     Project
< - - - - - - - - - - - Value Based Metric - - - - - - - - - - - - >      Gross      Gross
Project Name                   Prj No.      Cash Flow Ratio             Rate of Return       Net Present \$          Margin      Margin

Ranked Best to Worst Performing by Rate of Return

Tunnel Design for DOT                S6X12677                    124.76%                      130%      \$      103,026         36.74%      36.26%
CM Support for Yukon SC              S8L72110                     99.02%                      106%      \$      145,154         63.08%      62.23%
Design Specs for Nat Towers          M3C18901                    101.28%                      101%      \$       55,299         51.31%      49.03%
Security Retrofit - Port Auth        S4B16771                     75.59%                       80%      \$      427,993         47.61%      28.20%
School Upgrades - West NP            M7D19880                     77.32%                       77%      \$      202,161         43.81%      41.15%
Surveys - R/R West Lines             S5L11850                     66.09%                       68%      \$    1,819,817         41.10%      31.64%
Stack/Block Model - PNT              S4C19901                     63.25%                       63%      \$       38,416         40.00%      38.83%
Cost Model Program - DS/LMT          S8K66100                     46.52%                       63%      \$       53,271         41.10%      38.57%
Mun Center - East Ohio               M5L88100                     14.21%                       57%      \$      422,711         49.62%      11.33%
Master Fac Plan - DLL SE Region      S5C81050                     34.17%                       49%      \$       16,286         45.54%      39.74%
Central Subway - CA ODT              M3L17001                     23.85%                       22%      \$        8,925         46.44%      44.89%
Security Upgrade - Chem Fac          M4B17701                     14.12%                       13%      \$       41,784         43.41%      26.05%
Research Lab Fac - US/CA/BZ          S5M19910                      9.66%                       10%      \$          102         43.97%       4.68%
Sewer Plants - ST/FM/LLM             S8K11561                      6.18%                        9%      \$       (2,509)        34.53%      11.00%
Water Pipelines - ST/FM/LLM          S8K11562                     -3.34%                       -8%      \$      (53,681)         8.90%       6.54%
Office Parks - I96 Corridor          M7L55220                     -4.25%                      -41%      \$      (34,929)        39.43%      27.26%

Recommendations to Management

Projects that provide marginal returns should not be developed as part of the company's growth strategy unless
there is some specific justification (such as establishing a toehold position in a new market, client is referring
other clients to Henson, client is helping Henson improve its overall processes, etc.) to warrant continued
investment in such projects. Projects that are marginal tend to be projects which have:

1. High Proportion of Direct Costs to Labor Costs. Since Direct Costs, such as Sub Contractors are not
marked up very high compared to Henson Labor, projects with cost structures that are primarily Direct
are very likely to be marginal projects for Henson. All costs must be paid and reported financially and as
such, management cannot simply focus on the "in-house service" portion of a project only, ignoring
the cash outflows that do not comprise in-house section on the S11 Report. Value is driven by ALL
cash outflows and cash inflows associated with a project.

2. Project costs (cash outflows) are too high in relation to project revenue billed (cash inflows). In order
to create positive valuations, Henson needs to consider a Toll Gate whereby Total Budgeted Project
Revenues are at least 35% higher than Total Budgeted Project Costs. This will "protect" projects from
negative valuations and ensure the entire portfolio of projects contributes to positive valuations.

3. Rates of Return and Net Cash Flow Ratios below 10% (Cost of Capital). Henson should consider
reporting the Net Cash Flow Ratio as the "approximate" project rate of return on the S11 Report.
For projects that are substantially complete (good history of both cash inflows and outflows),
there appears to be a high correlation between the Net Cash Flow Ratio and the Project's Rate of
Return. A quick and easy way to approximate a project's rate of return, is to calculate the Net Cash
Flow Ratio per the S11 Project Report.

Basic Recommendation
Going forward, Henson should consider inclusion of "valuation" type metrics for evaluating the financial
performance of projects since it is critical that projects have positive impacts on shareholder value.
The current approach of evaluating performance by looking at Gross Margin is inappropriate
for meeting the financial objective of increasing shareholder wealth. This financial analysis provides
a basic introduction to "value-based" type metrics and the graph below illustrates the "poor"
correlation between Gross Margin and Value Based Metrics.

Correlation Graph #1 - Poor Correlation between Gross Margin and Rate of Return
The following graph summarizes the poor relationship between Gross Margin and Value Based Metrics. Therefore,
Gross Margin should not be relied upon as an indication of project value.

Correlation between GM and Rate of Return

140%
120%
100%
80%
& Return %'s
80%
GM & Return %'s
60%                                                             Rate of Return
40%                                                             In House GM
Total Prj GM
20%
0%
-20%    1   2   3   4   5   6   7   8   9 10 11 12 13 14 15

-40%
-60%
Number of Projects Analyzed

Correlation Graph # 2
The following graph illustrates the strong relationship between Net Cash Flow Ratio and a Project's Rate of Return. Therefore,
Managers can easily approximate value creation by simply calculating the Net Cash Flow Ratio off the S11. If the Ratio is
above 10%, then the project is most likely increasing shareholder value for Henson.

Strong Relationship between Net Cash Flow Ratio and
Project Rate of Return

140.00%
120.00%
100.00%
Ratio % & Return %

80.00%
60.00%
Cash Flow Ratio
40.00%
Ratio % & Return %
40.00%
Rate of Return
20.00%
0.00%
-20.00%   1   2   3   4   5   6   7   8   9 10 11 12 13 14 15 16
-40.00%
-60.00%
16 Projects Analyzed - Best to Worst
Preliminary Review by Ranking Net Cash Flow Ratio

In an effort to quickly identify projects that could be destroying shareholder value, all projects that were considered substantially
complete or billed out were ranked according to the Ratio of Cash Inflows to Outflows per the S11 Project Report.
Projects that were considered marginal or suspect were selected for further analysis using Rate of Return and Net Present Value.
Net Cash Flow Ratio = Cash Collected in Excess of Cost / Total Cost per the Cash Flow Section on the S11.

Ranked from worst to best
Project     Net Cash          Total          Net Cash
Project Description                  Number         Flow         Project Cost      Flow Ratio           Comments
xxxxxxxxxxxxxxxxx                             xxxxxxxx          (9,046)           38,017          -23.79%   Ouch!!!!!
xxxxxxxxxxxxxxxxx                             xxxxxxxx         (29,417)          691,519           -4.25%   Ouch!!!!!
xxxxxxxxxxxxxxxxx                             xxxxxxxx         (31,507)          944,581           -3.34%   Ouch!!!!!
xxxxxxxxxxxxxxxxx                             xxxxxxxx         215,235         3,485,161            6.18%   :( Not creating value
xxxxxxxxxxxxxxxxx                             xxxxxxxx          18,501           191,594            9.66%   :(
xxxxxxxxxxxxxxxxx                             xxxxxxxx         215,988         1,530,148           14.12%   Marginal
xxxxxxxxxxxxxxxxx                             xxxxxxxx       1,616,181       11,373,498            14.21%   :( Marginal
xxxxxxxxxxxxxxxxx                             xxxxxxxx         361,175         1,528,886           23.62%
xxxxxxxxxxxxxxxxx                             xxxxxxxx          19,606            82,205           23.85%
xxxxxxxxxxxxxxxxx                             xxxxxxxx         162,165           651,149           24.90%
xxxxxxxxxxxxxxxxx                             xxxxxxxx          93,913           354,193           26.51%
xxxxxxxxxxxxxxxxx                             xxxxxxxx         114,022           415,302           27.46%
xxxxxxxxxxxxxxxxx                             xxxxxxxx         791,671         2,423,894           32.66%
xxxxxxxxxxxxxxxxx                             xxxxxxxx           5,492            16,479           33.33%
xxxxxxxxxxxxxxxxx                             xxxxxxxx          16,862            49,345           34.17%
xxxxxxxxxxxxxxxxx                             xxxxxxxx         198,608           576,282           34.46%
xxxxxxxxxxxxxxxxx                             xxxxxxxx         140,900           386,220           36.48%   Project not complete
xxxxxxxxxxxxxxxxx                             xxxxxxxx         138,612           377,385           36.73%
xxxxxxxxxxxxxxxxx                             xxxxxxxx         272,858           729,571           37.40%
xxxxxxxxxxxxxxxxx                             xxxxxxxx          36,496            97,262           37.52%
xxxxxxxxxxxxxxxxx                             xxxxxxxx          55,008           146,393           37.58%
xxxxxxxxxxxxxxxxx                             xxxxxxxx          73,195           189,214           38.68%
xxxxxxxxxxxxxxxxx                             xxxxxxxx         134,748           346,977           38.83%
xxxxxxxxxxxxxxxxx                             xxxxxxxx         323,794           757,549           42.74%   Project not complete
xxxxxxxxxxxxxxxxx                             xxxxxxxx         570,602         1,320,746           43.20%
xxxxxxxxxxxxxxxxx                             xxxxxxxx         119,221           273,892           43.53%   Project not complete
xxxxxxxxxxxxxxxxx                             xxxxxxxx         109,525           250,005           43.81%
xxxxxxxxxxxxxxxxx                             xxxxxxxx          72,442           158,139           45.81%
xxxxxxxxxxxxxxxxx                             xxxxxxxx         166,130           362,508           45.83%
xxxxxxxxxxxxxxxxx                             xxxxxxxx          55,872           120,105           46.52%
Project   Net Cash       Total        Net Cash
Project Description     Number       Flow      Project Cost    Flow Ratio        Comments
xxxxxxxxxxxxxxxxx                xxxxxxxx       245,839        522,822         47.02%
xxxxxxxxxxxxxxxxx                xxxxxxxx         9,681         20,358         47.55%
xxxxxxxxxxxxxxxxx                xxxxxxxx        58,430        122,177         47.82%
xxxxxxxxxxxxxxxxx                xxxxxxxx       154,073        320,505         48.07%
xxxxxxxxxxxxxxxxx                xxxxxxxx       118,107        227,067         52.01%
xxxxxxxxxxxxxxxxx                xxxxxxxx         1,492           2,764        53.98%
xxxxxxxxxxxxxxxxx                xxxxxxxx        91,553        163,689         55.93%
xxxxxxxxxxxxxxxxx                xxxxxxxx        25,499         45,498         56.04%
xxxxxxxxxxxxxxxxx                xxxxxxxx       292,216        517,303         56.49%
xxxxxxxxxxxxxxxxx                xxxxxxxx        22,107         38,179         57.90%
xxxxxxxxxxxxxxxxx                xxxxxxxx        50,559         84,491         59.84%
xxxxxxxxxxxxxxxxx                xxxxxxxx     2,282,078      3,793,402         60.16%
xxxxxxxxxxxxxxxxx                xxxxxxxx       114,668        188,979         60.68%
xxxxxxxxxxxxxxxxx                xxxxxxxx       260,077        428,329         60.72%
xxxxxxxxxxxxxxxxx                xxxxxxxx       130,290        210,642         61.85%
xxxxxxxxxxxxxxxxx                xxxxxxxx        54,072         85,494         63.25%
xxxxxxxxxxxxxxxxx                xxxxxxxx       142,112        215,287         66.01%
xxxxxxxxxxxxxxxxx                xxxxxxxx     2,495,106      3,775,128         66.09%
xxxxxxxxxxxxxxxxx                xxxxxxxx       383,502        566,132         67.74%
xxxxxxxxxxxxxxxxx                xxxxxxxx        37,226         54,595         68.19%
xxxxxxxxxxxxxxxxx                xxxxxxxx        31,767         44,380         71.58%
xxxxxxxxxxxxxxxxx                xxxxxxxx        39,636         54,508         72.72%
xxxxxxxxxxxxxxxxx                xxxxxxxx       548,158        725,193         75.59%
xxxxxxxxxxxxxxxxx                xxxxxxxx        73,065         96,129         76.01%
xxxxxxxxxxxxxxxxx                xxxxxxxx       277,583        359,011         77.32%
xxxxxxxxxxxxxxxxx                xxxxxxxx        32,049         40,991         78.19%
xxxxxxxxxxxxxxxxx                xxxxxxxx       130,923        166,805         78.49%
xxxxxxxxxxxxxxxxx                xxxxxxxx        14,448         18,159         79.56%
xxxxxxxxxxxxxxxxx                xxxxxxxx     4,281,268      5,371,634         79.70%
xxxxxxxxxxxxxxxxx                xxxxxxxx       152,058        187,327         81.17%
xxxxxxxxxxxxxxxxx                xxxxxxxx        19,408         23,060         84.16%
xxxxxxxxxxxxxxxxx                xxxxxxxx       150,480        177,017         85.01%
xxxxxxxxxxxxxxxxx                xxxxxxxx       293,034        332,418         88.15%
xxxxxxxxxxxxxxxxx                xxxxxxxx        59,681         67,658         88.21%
xxxxxxxxxxxxxxxxx                xxxxxxxx        14,942         15,643         95.52%
xxxxxxxxxxxxxxxxx                xxxxxxxx       208,548        218,264         95.55%
xxxxxxxxxxxxxxxxx                xxxxxxxx        26,827         27,830         96.40%
xxxxxxxxxxxxxxxxx                xxxxxxxx        67,530         68,432         98.68%
xxxxxxxxxxxxxxxxx                xxxxxxxx       185,091        186,925         99.02% Project not complete
Project   Net Cash       Total        Net Cash
Project Description     Number       Flow      Project Cost    Flow Ratio   Comments
xxxxxxxxxxxxxxxxx                xxxxxxxx        73,331         72,404       101.28%
xxxxxxxxxxxxxxxxx                xxxxxxxx        60,959         59,784       101.97%
xxxxxxxxxxxxxxxxx                xxxxxxxx      128,375         102,899       124.76%
xxxxxxxxxxxxxxxxx                xxxxxxxx        18,041         12,011       150.20%
xxxxxxxxxxxxxxxxx                xxxxxxxx         4,909           2,653      185.04%
xxxxxxxxxxxxxxxxx                xxxxxxxx        16,314           5,491      297.10%
Rate of Return for Projects
Summarize Rates of Return

Basic Concept:

All investments must generate returns higher than the cost of the investment; otherwise
the investment will destroy value. The rate of return for Henson is based on the cost of
capital. When a projects's rate of return is higher than the Cost of Capital, the project
increases shareholder value. If the project's rate of return is below the Cost of Capital,
the project will negatively impact shareholder wealth. Additionally, we can add a "risk
premium" to those projects that carry higher risk. For the sake of keeping things
simple, we will simply use Henson's Cost of Capital as our discount rate.

Calculating Rate of Return:

Rate of Return is calculated as the Internal Rate of Return or IRR by discounting cash
inflows (payments made by clients) and cash outflows (amounts paid out for burdened
labor, direct costs, etc.) at a rate whereby the inflows = outflows. Another way of
understanding the calculation is to simply find the discount rate that gives a Net Present
Value of - 0 - for the project.

Required Inputs:

In order to calculate a project's rate of return, the Project Accountant will need to run:

1) OAR800 - Billing and Receipt History Report to ascertain cash inflows by month/year

2) Monthly Burdened Cost during the life of the project, summarized by month. Run Expenditure
Inquiry, export to Excel, format Expenditure Date to Month/Year, SubTotal by Expenditure Date.

3) Schedule the cash inflows (Step 1) and cash outflows (Step 2), calculate the Net Cash Flows,
and use the Excel Financial Functions to calculate Rate of Return and Net Present Value.

Summarize Rates of Returns for Projects Analyzed:

Project: M5L88100 - Municipal Center East Ohio                                       57%
Project: S8K11561 - Sewer Plants - ST/FM/LLM                                          9%
Project: S8K11562 - Water Pipelines -ST/FM/LLM                                       -8%
Project: M7L55220 - Office Parks I-96 Corridor                                      -41%
Project: S4C19901 - Stack & Block Model - PNT                                        63%
Project: S8K66100 - Cost Model Program - DS/LMT                                      63%
Project: M3L17001 - Central Subway - CA ODT                                          22%
Project: S4B16771 - Security Retrofit - Port Authority                               80%
Project: M3C18901 - Design Specs for National Towers                                101%
Project: M4B17701 - Security Upgrades for Chem Facilities                            13%
Project: S5M19910 - Research Lab Facility - US/CA/BZ                                 10%
Project: M7D19880 - School Upgrades - West NP                                        77%
Project: S5C81050 - Master Plan Facility - DLL SE                                    49%
Project: S6X12677 - Tunnel Design for DOT                                           130%
Project: S8L72110 - CM Support for Yukon SC                                         106%
Project: S5L11850 - Railroad Surveys West Lines                                      68%
Net Present Value for Projects
Summarize Net Present Values

Basic Concept:

The Accounting Model tells us how much we invest in projects, but it tells us nothing about how well our
investment is doing over time. The Finance Model on the other hand considers the following:
1. Time Vaue of Money - \$ 1,000 a year from now is not worth a \$ 1,000 today
2. Risk - We expect to get paid \$ 1,000 when the work is done, but we're not absolutely certain
3. Opportunity Cost - If we have the use of \$ 1,000 now, we have an "opportunity" to do something with it
Because the Finance Model includes these assumptions in evaluating performance, it tends to be a more
accurate model than the Accounting Model. One of the primary metrics within the Finance Model is
Net Present Value. Net Present Value is what a project is worth today.

Calculating Net Present Value:

Net Present Value is calculated by discounting the cash inflows and cash outflows using a discount rate.
The discount rate used is the Cost of Capital (Cost of Debt + Cost of Equity). Projects that earn more than
the Cost of Capital have a positive Net Present Value and projects that earn less than the Cost of
Capital have a negative Net Present Value.

Required Inputs:

Same as Rate of Return. Within Microsoft Excel, use the financial function =NPV for annual cash flows
and the financial function =XNPV for monthly cash flows.

Summarize Amount of Value Created:

Project: S8K11561 - Sewer Plants ST/FM/LLM                             \$       (2,509)
Project: S8K11562 - Water Pipelines ST/FM/LLM                          \$      (53,681)
Project: M7L55220 - Office Parks I 96 Corridor                         \$      (34,929)
Project: S4C19901 - Stack & Block Model PNT                            \$       53,271
Project: S8K66100 - Cost Model Program DS / LMT                        \$       38,416
Project: M3L17001 - Central Subway - CA ODT                            \$        8,925
Project: S4B16771 - Security Retrofit for Port Authority               \$      427,993
Project: M3C18901 - Design Specs for National Towers                   \$       55,299
Project: M4B17701 - Security Upgrades - Chem Fac                       \$       41,784
Project: S5M19910 - Research Lab Fac - US / CA / BZ                    \$          102
Project: M7D19880 - School Upgrades West NP                            \$      202,161
Project: S5C81050 - Master Fac Plan - DLL SE Region                    \$       16,286
Project: S6X12677 - Tunnel Design for DOT                              \$      103,026
Project: S8L72110 - CM Support for Yukon SC    \$     145,154
Project: S5L11850 - Surveys - R/R West Lines   \$   1,819,817
Calculate Project Rate of Return & Net Present Value
Project: M5L88100 - Mun Center - East Ohio

Monthly               Cash           Cash           Net           Present
Period     Mo/Yr     Inflows        Outflows       Cash            Value
Payments *     B-Labor/ODC **              (simple calc)
1 Aug-99                 0          619,306   -619,306        (614,401)
2 Sep-99           473,289           74,799    398,490         392,203
3 Oct-99           794,309          540,350    253,959         247,972
4 Nov-99           398,970        1,237,911   -838,941        (812,676)
5 Dec-99           455,191          668,203   -213,012        (204,709)
6 Jan-00           454,364          147,003    307,361         293,041
7 Feb-00           364,702          280,725     83,977          79,430
8 Mar-00           942,948          650,551    292,397         274,376
9 Apr-00                 0           37,955    -37,955         (35,334)
10 May-00           429,794          424,520      5,274           4,871
11 Jun-00           985,343          212,622    772,721         708,003
12   Jul-00               0          586,256   -586,256        (532,901)
13 Aug-00           296,744          104,678    192,066         173,203
14 Sep-00                 0         -323,186    323,186         289,138
15 Oct-00                 0           62,720    -62,720         (55,668)
16 Nov-00           324,021           23,709    300,312         264,435
17 Dec-00                 0           38,176    -38,176         (33,349)
18 Jan-01                 0           35,147    -35,147         (30,460)
19 Feb-01                 0            9,527     -9,527          (8,191)
20 Mar-01                 0            4,058     -4,058          (3,462)
21 Apr-01                 0           50,029    -50,029         (42,335)
22 May-01                 0            5,014     -5,014          (4,209)
23 Jun-01                 0              373       -373            (311)
24   Jul-01               0                0          0                0 Summarize Net Cash Flow on Annual Basis:
25 Aug-01                 0              242       -242            (199)                Year       Net Flow
26 Sep-01           187,986              487    187,499         152,479                     1999 -1,018,809
27 Oct-01                 0            3,486     -3,486          (2,812)                    2000 1,552,187
28 Nov-01                 0            1,400     -1,400          (1,120)                    2001      78,159
29 Dec-01                 0               64        -64              (51)
TOTAL          6,107,661        5,496,124                    496,964
Economic Analysis on Monthly Basis:                                               Economic Analysis on Annual Basis:
Project Rate of Return =>                   113.43%                                                 57.23% (1)
Net Present Value =>                         504,867                                          \$422,308.86 (2)
Monthly Cost of Investment =>                 0.80% (Annual Cost of Capital divided by 12)           9.58% (3)

* Per Oracle Report OAR800 - Billing and Receipt History
** Total Burdened Cost per Detail Dump of all Charges

(1): Rate of Return for this project using annualized cash flows
(2): Net Present Value of project is negative when the Rate of Return is less than the Cost of Capital
(3): Cost of Capital is used as the Cost of Investment, no risk premium has been added to project
Calculate Project Rate of Return & Net Present Value
Project: S8K11561 - Sewer Plants - ST/FM/LLM

Monthly               Cash           Cash              Net           Present
Period     Mo/Yr     Inflows        Outflows          Cash            Value
Payments *     B-Labor/ODC **                  (simple calc)
1 Nov-99                0           10,593        -10,593        (10,509)
2 Dec-99                0           20,381        -20,381        (20,059)
3 Jan-00                0           44,924        -44,924        (43,865)
4 Feb-00                0           23,304        -23,304        (22,574)
5 Mar-00                0            4,690         -4,690          (4,507)
6 Apr-00                0            3,736         -3,736          (3,562)
7 May-00                0              311           -311            (295)
8 Jun-00                0            1,216         -1,216          (1,141)
9  Jul-00               0              151           -151            (140)
10 Aug-00                0            3,049         -3,049          (2,816)
11 Sep-00                0            1,366         -1,366          (1,251)
12 Oct-00                0            2,577         -2,577          (2,343)
13 Nov-00                0            1,273         -1,273          (1,148)
14 Dec-00                0           12,367        -12,367        (11,064)
15 Jan-01                0           17,909        -17,909        (15,895)
16 Feb-01                0           23,071        -23,071        (20,315)
17 Mar-01                0           16,591        -16,591        (14,494)
18 Apr-01           13,827           21,802         -7,975          (6,911)
19 May-01           43,995           27,283         16,712         14,368
20 Jun-01           53,120           16,750         36,370         31,023
21  Jul-01               0           32,110        -32,110        (27,171)
22 Aug-01                0           32,305        -32,305        (27,120)
23 Sep-01           96,520           50,233         46,287         38,551
24 Oct-01                0          205,285       -205,285       (169,620)
25 Nov-01                0           51,715        -51,715        (42,392)
26 Dec-01           88,315          237,089       -148,774       (120,987)
27 Jan-02           69,322          541,986       -472,664       (381,339)
28 Feb-02             -503           44,881        -45,384        (36,325)
29 Mar-02          607,831           63,899        543,932        431,912
30 Apr-02          282,362           57,002        225,360        177,532
31 May-02          186,651          242,078        -55,427        (43,318)

16                                                 a5ec9401-b1ee-44b3-9146-bc6c21978f49.xls   Matt H. Evans
32    Jun-02                   0            37,202         -37,202         (28,844)
33     Jul-02            338,337           187,047         151,290         116,372            Summarize Net Cash Flow on Annual Basis:
34    Aug-02             228,807           352,155        -123,348         (94,127)              Year       Net Flow
35    Sep-02             555,619           376,016         179,603         135,971                    1999    -30,974
36    Oct-02             432,531           479,497         -46,966         (35,274)                   2000    -98,963
37    Nov-02             595,904           246,225         349,679         260,551                    2001 -436,365
38    Dec-02             112,941           147,855         -34,914         (25,809)                   2002 633,960
TOTAL             3,705,579         3,637,922                          (8,935)

Economic Analysis on Monthly Basis:                                                                Economic Analysis on Annual Basis:
Project Rate of Return =>                         8.59%                                                    9.08% (1)
Net Present Value =>                              -6,188                                              (\$2,634.75) (2)
Monthly Cost of Investment =>                     0.80% (Annual Cost of Capital divided by 12)             9.58% (3)

* Per Oracle Report OAR800 - Billing and Receipt History
** Total Burdened Cost per Detail Dump of all Charges

(1): Rate of Return for this project using annualized cash flows
(2): Net Present Value of project is negative when the Rate of Return is less than the Cost of Capital
(3): Cost of Capital is used as the Cost of Investment, no risk premium has been added to project

17                                                        a5ec9401-b1ee-44b3-9146-bc6c21978f49.xls                                       Matt H. Evans
Calculate Project Rate of Return & Net Present Value
Project: S8K11562 - Water Pipelines - ST/FM/LLM

Monthly                Cash            Cash          Net          Present
Period     Mo/Yr      Inflows         Outflows      Cash           Value
Payments *     B-Labor/ODC **             (simple calc)
1 Apr-00                 0           7,370     -7,370           (7,312)
2 May-00                 0          28,624    -28,624          (28,172)
3 Jun-00                 0          28,065    -28,065          (27,404)
4   Jul-00               0          22,871    -22,871          (22,155)
5 Aug-00            74,658          19,944     54,714           52,581
6 Sep-00            31,996          68,090    -36,094          (34,413)
7 Oct-00                 0          48,835    -48,835          (46,191)
8 Nov-00            72,342          34,706     37,636           35,316
9 Dec-00                 0          53,189    -53,189          (49,516)
10 Jan-01           144,287          60,375     83,912           77,498
11 Feb-01                 0          32,979    -32,979          (30,217)
12 Mar-01                 0          93,959    -93,959          (85,408)
13 Apr-01                 0          59,037    -59,037          (53,239)
14 May-01                 0          67,693    -67,693          (60,561)
15 Jun-01           231,688          20,009    211,679         187,878
16   Jul-01               0          46,019    -46,019          (40,522)
17 Aug-01                 0          85,140    -85,140          (74,374)
18 Sep-01            91,961          88,839      3,122            2,706
19 Oct-01                 0          25,974    -25,974          (22,332)
20 Nov-01                 0           8,603     -8,603           (7,338)
21 Dec-01                 0          10,163    -10,163           (8,600)
22 Jan-02                 0           7,212     -7,212           (6,055)
23 Feb-02                 0           1,314     -1,314           (1,094)
24 Mar-02                 0             817       -817             (675)   Summarize Net Cash Flow on Annual Basis:
25 Apr-02                 0               3         -3               (3)      Year     Net Flow
26 May-02                 0          20,703    -20,703          (16,837)         2000 -132,699
27 Jun-02           266,140           2,285    263,855         212,874           2001 -130,855
28   Jul-02               0             281       -281             (225)         2002 232,044
29 Aug-02                 0               0          0                 0
30 Sep-02                 0               0          0                 0
31 Oct-02                 0           1,469     -1,469           (1,148)
32 Nov-02                 0              10        -10               (8)
TOTAL            913,072         944,581                     (54,945)

Economic Analysis on Monthly Basis:                                             Economic Analysis on Annual Basis:
Project Rate of Return =>                     0.00%                                                    -8.18% (1)
Net Present Value =>                         -54,562                                              (\$53,722.26) (2)
Monthly Cost of Investment =>                 0.80% (Annual Cost of Capital divided by 12)              9.58% (3)

* Per Oracle Report OAR800 - Billing and Receipt History
** Total Burdened Cost per Detail Dump of all Charges

(1): Rate of Return for this project using annualized cash flows
(2): Net Present Value of project is negative when the Rate of Return is less than the Cost of Capital
(3): Cost of Capital is used as the Cost of Investment, no risk premium has been added to project
Calculate Project Rate of Return & Net Present Value
Project: M7L55220 - Office Parks - I96 Corridor

Monthly                   Cash             Cash               Net           Present
Period     Mo/Yr         Inflows          Outflows           Cash            Value
Payments *      B-Labor/ODC **                   (simple calc)
1 Jun-01                    0             3,848          -3,848           (3,817)
2   Jul-01                  0             7,701          -7,701           (7,580)
3 Aug-01                    0            23,474         -23,474         (22,921)
4 Sep-01                    0            33,426         -33,426         (32,380)
5 Oct-01                    0            45,373         -45,373         (43,605)
6 Nov-01                    0            66,787         -66,787         (63,675)
7 Dec-01              142,462            44,294          98,168          92,853
8 Jan-02                    0            57,594         -57,594         (54,045)
9 Feb-02               47,254            72,093         -24,839         (23,123)
10 Mar-02               47,225            47,348            -123             (113)
11 Apr-02               94,450            34,892          59,558          54,570               Summarize Net Cash Flow on Annual Basis:
12 May-02                    0            47,205         -47,205         (42,909)                 Year     Net Flow
13 Jun-02               47,225            36,811          10,414            9,391                    2001     -82,441
14   Jul-02             47,355            34,592          12,763          11,418                     2002      48,396
15 Aug-02               94,450            40,292          54,158          48,068
16 Sep-02                    0            30,650         -30,650         (26,989)
17 Oct-02                    0            30,430         -30,430         (26,583)
18 Nov-02              141,675            39,331         102,344          88,696
TOTAL               662,096           696,141                         (42,741)

Economic Analysis on Monthly Basis:                                                                 Economic Analysis on Annual Basis:
Project Rate of Return =>                       0.00%                                                   -41.30% (1)
Net Present Value =>                           -42,720                                              (\$34,929.73) (2)
Monthly Cost of Investment =>                   0.80% (Annual Cost of Capital divided by 12)              9.58% (3)

* Per Oracle Report OAR800 - Billing and Receipt History
** Total Burdened Cost per Detail Dump of all Charges

(1): Rate of Return for this project using annualized cash flows
(2): Net Present Value of project is negative when the Rate of Return is less than the Cost of Capital
(3): Cost of Capital is used as the Cost of Investment, no risk premium has been added to project
Calculate Project Rate of Return & Net Present Value
Project: S8K66100 - Cost Model Program/Study for DS/LMT

Monthly                   Cash             Cash               Net            Present
Period     Mo/Yr         Inflows          Outflows           Cash             Value
Payments *      B-Labor/ODC **                    (simple calc)
1 Aug-01                    0             1,835           -1,835             (1,820)
2 Sep-01                    0            19,112          -19,112            (18,810)
3 Oct-01                    0             8,613           -8,613             (8,410)
4 Nov-01               48,882             9,337           39,545             38,307
5 Dec-01                    0             2,452           -2,452             (2,357)
6 Jan-02                    0            15,491          -15,491            (14,769)
7 Feb-02               29,329            10,416           18,913             17,889
8 Mar-02                    0            12,519          -12,519            (11,747)
9 Apr-02                    0             6,362           -6,362             (5,922)
10 May-02                    0            17,157          -17,157            (15,845)
11 Jun-02                    0            15,653          -15,653            (14,342)
12   Jul-02             97,764               441           97,323             88,466
13 Aug-02                    0                 0                0                  0             Summarize Net Cash Flow on Annual Basis:
14 Sep-02                    0               498             -498               (445)               Year     Net Flow
15 Oct-02                    0               201             -201               (179)            OUTFLOW     -120,111
16 Nov-02               19,553                25           19,528             17,195             INFLOW       195,528
TOTAL               195,528           120,111                              67,210

Economic Analysis on Monthly Basis:                                                                   Economic Analysis on Annual Basis:
Project Rate of Return =>                     956.43%                                                     62.79%
Net Present Value =>                            68,044                                                \$53,224.09 (2)
Monthly Cost of Investment =>                   0.80% (Annual Cost of Capital divided by 12)               9.58% (3)

* Per Oracle Report OAR800 - Billing and Receipt History
** Total Burdened Cost per Detail Dump of all Charges

(1): Rate of Return for this project using annualized cash flows
(2): Net Present Value of project is negative when the Rate of Return is less than the Cost of Capital
(3): Cost of Capital is used as the Cost of Investment, no risk premium has been added to project
Calculate Project Rate of Return & Net Present Value
Project: S4C19901 - Stack & Block Model - PNT

Monthly                Cash              Cash             Net           Present
Period     Mo/Yr      Inflows           Outflows         Cash            Value
Payments *        B-Labor/ODC **                (simple calc)
1 Sep-01                  0             23,078      -23,078         (22,895)
2 Oct-01                  0             24,064      -24,064         (23,684)
3 Nov-01                  0             20,892      -20,892         (20,399)
4 Dec-01                  0             16,603      -16,603         (16,084)
5 Jan-02                  0                674         -674            (648)
6 Feb-02            139,566                183      139,383         132,889
7 Mar-02                  0                  0            0                 0
8 Apr-02                  0                  0            0                 0
9 May-02                  0                  0            0                 0
10 Jun-02                  0                  0            0                 0
11  Jul-02                 0                  0            0                 0
12 Aug-02                  0                  0            0                 0 Summarize Net Cash Flow on Annual Basis:
13 Sep-02                  0                  0            0                 0    Year         Net Flow
14 Oct-02                  0                  0            0                 0 OUTFLOW               -85,494
15 Nov-02                207                  0          207             184 INFLOW                 139,773

TOTAL           139,773             85,494                      49,363

Economic Analysis on Monthly Basis:                                               Economic Analysis on Annual Basis:
Project Rate of Return =>                   386.72%                                                     63.49%
Net Present Value =>                          49,906                                                \$38,381.94 (2)
Monthly Cost of Investment =>                 0.80% (Annual Cost of Capital divided by 12)               9.58% (3)
Calculate Project Rate of Return & Net Present Value
Project: M3L17001 - Central Subway System - CA ODT

Monthly                    Cash              Cash               Net            Present
Period     Mo/Yr          Inflows           Outflows           Cash             Value
Payments *       B-Labor/ODC **                    (simple calc)
1    Jun-02                   0              4,386          -4,386            (4,352)
2     Jul-02                  0             20,898         -20,898           (20,568)
3    Aug-02                   0             33,354         -33,354           (32,568) Summarize Net Cash Flow on Annual Basis:
4    Sep-02                   0             30,749         -30,749           (29,786)    Year       Net Flow
5    Oct-02                   0            -10,548          10,548            10,137 OUTFLOW           -83,112
6    Nov-02             101,766              4,272          97,494            92,951 INFLOW           101,766
TOTAL               101,766             83,112                            15,814

Economic Analysis on Monthly Basis:                                                     Economic Analysis on Annual Basis:
Project Rate of Return =>                       117.09%                                                   22.45%
Net Present Value =>                              16,032                                              \$8,904.43 (2)
Monthly Cost of Investment =>                     0.80% (Annual Cost of Capital divided by 12)             9.58% (3)

* Per Oracle Report OAR800 - Billing and Receipt History
** Total Burdened Cost per Detail Dump of all Charges
Calculate Project Rate of Return & Net Present Value
Project: S4B16771 - Security Retrofit for Port Authority

Monthly                  Cash              Cash              Net            Present
Period     Mo/Yr        Inflows           Outflows          Cash             Value
Payments *      B-Labor/ODC **                    (simple calc)
1 Mar-01                    0             2,457          -2,457           (2,438)
2 Apr-01                    0             2,843          -2,843           (2,798)
3 May-01                    0             3,316          -3,316           (3,238)
4 Jun-01                    0            58,052         -58,052          (56,235)
5   Jul-01             45,760            81,482         -35,722          (34,329)
6 Aug-01              181,834            21,380         160,454         152,978
7 Sep-01              103,587            15,193          88,394           83,608
8 Oct-01              195,554            16,095         179,459         168,399
9 Nov-01               19,617           116,624         -97,007          (90,307)
10 Dec-01                  456            57,250         -56,794          (52,453)
11 Jan-02                4,816            60,800         -55,984          (51,295)
12 Feb-02               33,128            24,073           9,055            8,231
13 Mar-02              159,260            51,958         107,302           96,764
14 Apr-02               32,148            20,738          11,410           10,208
15 May-02               11,224            26,340         -15,116          (13,417)       Summarize Net Cash Flow on Annual Basis:
16 Jun-02               25,578            53,640         -28,062          (24,709)          Year    Net Flow
17   Jul-02             60,873            44,081          16,792           14,669        OUTFLOW     -731,021
18 Aug-02              226,957            23,396         203,561         176,414         INFLOW     1,314,578
19 Sep-02               41,701            25,905          15,796           13,581
20 Oct-02               58,249             9,575          48,674           41,517
21 Nov-02               72,604            11,409          61,195           51,784
22 Dec-02               41,232             4,414          36,818           30,909
TOTAL             1,314,578           731,021                         517,843

Economic Analysis on Monthly Basis:                                                           Economic Analysis on Annual Basis:
Project Rate of Return =>                  22770.32%                                              79.83%
Net Present Value =>                          524,251                                            427,659 (2)
Monthly Cost of Investment =>                  0.80% (Annual Cost of Capital divided by 12)        9.58% (3)

* Per Oracle Report OAR800 - Billing and Receipt History
** Total Burdened Cost per Detail Dump of all Charges
Calculate Project Rate of Return & Net Present Value
Project: M3C18901 - Design Specs for National Towers

Monthly                  Cash              Cash               Net           Present
Period     Mo/Yr        Inflows           Outflows           Cash            Value
Payments *       B-Labor/ODC **                    (simple calc)
1 Mar-01                    0              1,255          -1,255          (1,245)
2 Apr-01                    0             14,511         -14,511        (14,282)
3 May-01                    0              5,993          -5,993          (5,852)
4 Jun-01                    0             21,183         -21,183        (20,520)
5   Jul-01             76,690             19,478          57,212         54,982
6 Aug-01                7,126              5,336           1,790           1,707
7 Sep-01               32,432                 59          32,373         30,621
8 Oct-01               25,992                941          25,051         23,507
9 Nov-01                    0              1,423          -1,423          (1,324)
10 Dec-01                    0                489            -489            (452)
11 Jan-02                    0              1,534          -1,534          (1,406)
12 Feb-02                    0                  0               0               0
13 Mar-02                  671                 30             641             578
14 Apr-02                    0                  0               0               0        Summarize Net Cash Flow on Annual Basis:
15 May-02                2,785                  0           2,785           2,472           Year    Net Flow
16 Jun-02                    0                  0               0               0        OUTFLOW      -72,404
17   Jul-02                  0                  0               0               0        INFLOW       145,696
18 Aug-02                    0                  0               0               0
19 Sep-02                    0                174            -174            (149)
TOTAL               145,696             72,404                         68,637

Economic Analysis on Monthly Basis:                                                           Economic Analysis on Annual Basis:
Project Rate of Return =>                   4923.99%                                            101.23%
Net Present Value =>                           69,335                                            55,260 (2)
Monthly Cost of Investment =>                  0.80% (Annual Cost of Capital divided by 12)       9.58% (3)

* Per Oracle Report OAR800 - Billing and Receipt History
** Total Burdened Cost per Detail Dump of all Charges
Calculate Project Rate of Return & Net Present Value
Project: M4B17701 - Security Upgrade - Chemical Facility

Monthly                   Cash             Cash               Net           Present
Period     Mo/Yr         Inflows          Outflows           Cash            Value
Payments *      B-Labor/ODC **                   (simple calc)
1 Apr-01                                    725            -725             (719)
2 May-01                                  3,638          -3,638           (3,581)
3 Jun-01                                 13,617         -13,617          (13,296)
4   Jul-01                               12,892         -12,892          (12,488)
5 Aug-01                                  4,801          -4,801           (4,614)
6 Sep-01                     0           10,308         -10,308           (9,828)
7 Oct-01                63,214            8,772          54,442           51,495
8 Nov-01                 3,278           12,927          -9,649           (9,054)
9 Dec-01                                 17,043         -17,043          (15,866)
10 Jan-02                37,772           37,733              39               36
11 Feb-02                64,744           25,227          39,517           36,208
12 Mar-02                                 40,638         -40,638          (36,940)
13 Apr-02                                 54,576         -54,576          (49,217)
14 May-02               165,911           48,656         117,255          104,902
15 Jun-02                                178,709        -178,709         (158,616)        Summarize Net Cash Flow on Annual Basis:
16   Jul-02             541,648          227,891         313,757          276,273             Year      Net Flow
17 Aug-02                                288,165        -288,165         (251,730)        OUTFLOW     -1,548,022
18 Sep-02               461,777          136,454         325,323          281,938         INFLOW        1,746,104
19 Oct-02               201,106          153,581          47,525           40,861
20 Nov-02               206,654          271,667         -65,013          (55,454)
TOTAL              1,746,104        1,548,022                          170,310

Economic Analysis on Monthly Basis:                                                            Economic Analysis on Annual Basis:
Project Rate of Return =>                     601.75%                                               12.80% (1)
Net Present Value =>                           174,705                                          \$41,455.77 (2)
Monthly Cost of Investment =>                   0.80% (Annual Cost of Capital divided by 12)         9.58% (3)

* Per Oracle Report OAR800 - Billing and Receipt History
** Total Burdened Cost per Detail Dump of all Charges

(1): Rate of Return for this project using annualized cash flows
(2): Net Present Value of project is negative when the Rate of Return is less than the Cost of Capital
(3): Cost of Capital is used as the Cost of Investment, no risk premium has been added to project
Calculate Project Rate of Return & Net Present Value
Project: S5M19910 - Research Lab Facility - US / CA / BZ Local

Monthly                   Cash             Cash               Net            Present
Period     Mo/Yr         Inflows          Outflows           Cash             Value
Payments *      B-Labor/ODC **                    (simple calc)
1 May-01                     0              191             -191             (189)
2 Jun-01                     0              736             -736             (725)
3   Jul-01                   0           16,779          -16,779          (16,384)
4 Aug-01                19,179              153           19,026           18,431
5 Sep-01                17,574           15,628            1,946            1,870
6 Oct-01                     0           13,695          -13,695          (13,057)
7 Nov-01                33,856           16,050           17,806           16,842
8 Dec-01                17,111           29,461          -12,350          (11,589)
9 Jan-02                17,264               90           17,174           15,988
10 Feb-02                     0           14,320          -14,320          (13,225)
11 Mar-02                16,833            1,900           14,933           13,682
12 Apr-02                34,019           30,405            3,614            3,285
13 May-02                17,540           17,721             -181             (164)
14 Jun-02                17,712           17,802              -90              (81)
15   Jul-02              16,491              251           16,240           14,414
16 Aug-02                     0           13,888          -13,888          (12,229)      Summarize Net Cash Flow on Annual Basis:
17 Sep-02                     0                1               -1                (1)        Year     Net Flow
18 Oct-02                     0            2,428           -2,428           (2,104)      OUTFLOW     -191,655
19 Nov-02                 2,513               95            2,418            2,079       INFLOW       210,092
20 Dec-02                     0               60              -60              (52)
TOTAL                210,092          191,655                            16,793

Economic Analysis on Monthly Basis:                                                           Economic Analysis on Annual Basis:
Project Rate of Return =>                   1136.34%                                               9.62% (1)
Net Present Value =>                           16,986                                             \$63.61 (2)
Monthly Cost of Investment =>                  0.80% (Annual Cost of Capital divided by 12)        9.58% (3)

* Per Oracle Report OAR800 - Billing and Receipt History
** Total Burdened Cost per Detail Dump of all Charges

(1): Rate of Return for this project using annualized cash flows
(2): Net Present Value of project is negative when the Rate of Return is less than the Cost of Capital
(3): Cost of Capital is used as the Cost of Investment, no risk premium has been added to project
Calculate Project Rate of Return & Net Present Value
Project: M7D19880 - K12 School Upgrades - West NP Schools

Monthly                   Cash              Cash                Net            Present
Period     Mo/Yr         Inflows           Outflows            Cash             Value
Payments *      B-Labor/ODC **                      (simple calc)
1 Aug-01                                    6,506           -6,506           (6,455)
2 Sep-01               48,253              21,412           26,841           26,418
3 Oct-01               51,253              38,670           12,583           12,286
4 Nov-01               58,145              36,998           21,147           20,485
5 Dec-01               58,561              19,697           38,864           37,349
6 Jan-02               64,254              23,879           40,375           38,494
7 Feb-02               96,254              24,767           71,487           67,617
8 Mar-02                    0              33,782          -33,782          (31,700)
9 Apr-02               53,217              28,590           24,627           22,926
10 May-02               48,217              35,692           12,525           11,567
11 Jun-02               48,217              23,224           24,993           22,900
12   Jul-02             58,717              20,787           37,930           34,478              Summarize Net Cash Flow on Annual Basis:
13 Aug-02               51,319              26,944           24,375           21,981                   Year    Net Flow
14 Sep-02                    0              13,679          -13,679          (12,238)             outflow       -359,417
15 Oct-02                    0               3,665           -3,665           (3,253)             inflow         636,407
16 Nov-02                    0               1,125           -1,125             (991)
TOTAL               636,407             359,417                           261,866

Economic Analysis on Monthly Basis:                                                                    Economic Analysis on Annual Basis:
Project Rate of Return =>          9964463440.00% <=Too Distorted , Estimate and use =>                     77.07%
Net Present Value =>                       264,438                                                     \$202,000.15 (2)
Monthly Cost of Investment =>               0.80% (Annual Cost of Capital divided by 12)                     9.58% (3)

* Per Oracle Report OAR800 - Billing and Receipt History
** Total Burdened Cost per Detail Dump of all Charges

(1): Rate of Return for this project using annualized cash flows
(2): Net Present Value of project is negative when the Rate of Return is less than the Cost of Capital
(3): Cost of Capital is used as the Cost of Investment, no risk premium has been added to project
Calculate Project Rate of Return & Net Present Value
Project: S5C81050 - Master Facility Plan for DLL SE Region

Monthly                   Cash             Cash               Net             Present
Period     Mo/Yr         Inflows          Outflows           Cash              Value
Payments *      B-Labor/ODC **                     (simple calc)
1 Oct-01                     0             2,179           -2,179           (2,161)
2 Nov-01                     0            13,362          -13,362         (13,151)
3 Dec-01                 4,647               702            3,945            3,852
4 Jan-02                35,218             4,637           30,581          29,624
5 Feb-02                 5,362             6,597           -1,235           (1,186)
6 Mar-02                 9,325               418            8,907            8,492
7 Apr-02                     0             5,136           -5,136           (4,858)
8 May-02                     0             5,760           -5,760           (5,405)
9 Jun-02                     0             7,128           -7,128           (6,635)
10   Jul-02              11,591             1,328           10,263            9,479             Summarize Net Cash Flow on Annual Basis:
11 Aug-02                     0             2,093           -2,093           (1,918)                 Year   Net Flow
12 Sep-02                     0                 7               -7               (6)            outflow       -49,345
13 Oct-02                    45                 0               45               41             inflow         73,607
14 Nov-02                     0                 0                0                 0
15 Dec-02                 7,419                 0            7,419            6,585
TOTAL                 73,607            49,345                           22,751

Economic Analysis on Monthly Basis:                                                                  Economic Analysis on Annual Basis:
Project Rate of Return =>                  11774.14%                                                     49.17% (1)
Net Present Value =>                           22,984                                                \$16,268.76 (2)
Monthly Cost of Investment =>                  0.80% (Annual Cost of Capital divided by 12)               9.58% (3)

* Per Oracle Report OAR800 - Billing and Receipt History
** Total Burdened Cost per Detail Dump of all Charges

(1): Rate of Return for this project using annualized cash flows
(2): Net Present Value of project is negative when the Rate of Return is less than the Cost of Capital
(3): Cost of Capital is used as the Cost of Investment, no risk premium has been added to project
Calculate Project Rate of Return & Net Present Value
Project: M9K10601 - Support Team for Fac Mgmt - ILBBC

Monthly                   Cash             Cash               Net    Present
Period     Mo/Yr         Inflows          Outflows           Cash     Value
Payments *     B-Labor/ODC **               (simple calc)
1 Sep-01             48,253                 0      48,253         47,871
2 Oct-01             51,253                 0      51,253         50,444
3 Nov-01             58,145            21,967      36,178         35,325
4 Dec-01             58,561            26,077      32,484         31,467
5 Jan-02             64,254            24,299      39,955         38,398
6 Feb-02             48,217            22,765      25,452         24,266
7 Mar-02             48,217            29,499      18,718         17,705
8 Apr-02             53,217             6,120      47,097         44,194
9 May-02             48,217             6,662      41,555         38,685
10 Jun-02             48,217               501      47,716         44,069            Summarize Net Cash Flow on Annual Basis:
11    Jul-02          58,717           -13,262      71,979         65,951                 Year      Net Flow
12 Aug-02             51,291             1,089      50,202         45,633            outflow         -151,829
13 Sep-02                  0             5,071      -5,071          (4,573)          inflow           636,559
14 Oct-02                  0             9,480      -9,480          (8,482)
15 Nov-02                  0             6,643      -6,643          (5,896)
16 Dec-02                  0             4,917      -4,917          (4,329)
TOTAL            636,559          151,829                     460,727
DO NOT INCLUDE THIS PROJECT IN ANALYSIS - SOME COSTS ARE SITTING IN COMPANION PROJECT
Economic Analysis on Monthly Basis:                                                       Economic Analysis on Annual Basis:
Project Rate of Return =>                    0.00%                                                 319%
Net Present Value =>                       465,280                                         \$391,566.24 (2)
Monthly Cost of Investment =>                0.80% (Annual Cost of Capital divided by 12)         9.58% (3)

* Per Oracle Report OAR800 - Billing and Receipt History
** Total Burdened Cost per Detail Dump of all Charges

(1): Rate of Return for this project using annualized cash flows
(2): Net Present Value of project is negative when the Rate of Return is less than the Cost of Capital
(3): Cost of Capital is used as the Cost of Investment, no risk premium has been added to project
Calculate Project Rate of Return & Net Present Value
Project: S6X12677 - Tunnel Design for DOT

Monthly                  Cash              Cash               Net           Present
Period     Mo/Yr        Inflows           Outflows           Cash            Value
Payments *       B-Labor/ODC **                   (simple calc)
1 May-02                    0            13,660         -13,660         (13,552)
2 Jun-02                    0            17,354         -17,354         (17,080)
3   Jul-02                  0            24,180         -24,180         (23,610)
4 Aug-02              115,373            14,856         100,517          97,370
5 Sep-02                    0            22,058         -22,058         (21,198)        Summarize Net Cash Flow on Annual Basis:
6 Oct-02               49,539            10,300          39,239          37,411              Year    Net Flow
7 Nov-02               66,362               501          65,861          62,295         outflow       -102,910
8 Dec-02                5,127                 1           5,126           4,810         inflow         236,401
TOTAL               236,401           102,910                         126,446

Economic Analysis on Monthly Basis:                                                           Economic Analysis on Annual Basis:
Project Rate of Return =>                  13533.62% <=Too Distorted , Estimate and use =>        129.72%
Net Present Value =>                          127,658                                         \$102,960.15 (2)
Monthly Cost of Investment =>                  0.80% (Annual Cost of Capital divided by 12)         9.58% (3)

* Per Oracle Report OAR800 - Billing and Receipt History
** Total Burdened Cost per Detail Dump of all Charges
Calculate Project Rate of Return & Net Present Value
Project: S8L72110 - CM Support for Yukon SC

Monthly                  Cash              Cash               Net           Present
Period     Mo/Yr        Inflows           Outflows           Cash            Value
Payments *       B-Labor/ODC **                   (simple calc)
1 Nov-01                    0             2,700          -2,700            (2,679)
2 Dec-01                    0             7,998          -7,998            (7,872)
3 Jan-02              104,297            65,677          38,620            37,710
4 Feb-02                    0            11,078         -11,078           (10,731)
5 Mar-02              160,040            14,606         145,434          139,765
6 Apr-02               30,407            10,233          20,174            19,234
7 May-02               38,181             9,840          28,341            26,807
8 Jun-02               19,545             9,111          10,434             9,791
9   Jul-02             19,545            10,851           8,694             8,094
10 Aug-02                    0            16,368         -16,368           (15,117)
11 Sep-02                    0            12,544         -12,544           (11,493)   Summarize Net Cash Flow on Annual Basis:
12 Oct-02                    0             8,347          -8,347            (7,587)        Year    Net Flow
13 Nov-02                    0            10,101         -10,101            (9,109)   outflow       -180,540
14 Dec-02                    0            -8,914           8,914             7,975    inflow         372,015
TOTAL               372,015           180,540                          184,786

Economic Analysis on Monthly Basis:                                                        Economic Analysis on Annual Basis:
Project Rate of Return =>           87410691.88% <=Too Distorted , Estimate and use =>         106.06%
Net Present Value =>                      186,550                                          \$145,054.64 (2)
Monthly Cost of Investment =>              0.80% (Annual Cost of Capital divided by 12)          9.58% (3)

* Per Oracle Report OAR800 - Billing and Receipt History
** Total Burdened Cost per Detail Dump of all Charges
Calculate Project Rate of Return & Net Present Value
Project: S5L11850 - Surveys for R/R West Lines

Monthly                 Cash            Cash           Net            Present
Period     Mo/Yr       Inflows         Outflows       Cash             Value
Payments *     B-Labor/ODC **               (simple calc)
1      Mar-99               0          18,004      -18,004          (17,862)
2      Apr-99               0          19,123      -19,123          (18,822)
3      May-99               0          21,624      -21,624          (21,114)
4      Jun-99               0          29,786      -29,786          (28,853)
5       Jul-99              0          68,217      -68,217          (65,558)
6      Aug-99               0          39,922      -39,922          (38,062)
7      Sep-99               0          35,095      -35,095          (33,194)
8      Oct-99         541,112          58,543      482,569          452,827
9      Nov-99               0          36,409      -36,409          (33,894)
10      Dec-99               0          17,082      -17,082          (15,776)
11      Jan-00          53,200          53,464         -264             (242)
12      Feb-00         122,800          43,003       79,797           72,535
13      Mar-00          53,200          44,497        8,703            7,848
14      Apr-00          53,200          46,648        6,552            5,862
15      May-00          53,200          53,364         -164             (146)
16      Jun-00          63,060          90,251      -27,191          (23,943)
17       Jul-00         53,200          72,005      -18,805          (16,427)
18      Aug-00               0          87,541      -87,541          (75,867)
19      Sep-00         117,167         122,576       -5,409           (4,651)
20      Oct-00         356,980         117,905      239,075          203,923
21      Nov-00         348,039         116,370      231,669          196,041
22      Dec-00               0         110,489     -110,489          (92,756)
23      Jan-01         286,669         107,025      179,644          149,618
24      Feb-01         366,254         138,081      228,173          188,531
25      Mar-01         187,644         159,527       28,117           23,048
26      Apr-01         229,747         122,754      106,993           87,009
27      May-01          53,200         124,095      -70,895          (57,197)
28      Jun-01         617,678         132,278      485,400          388,512
29       Jul-01         53,200          89,699      -36,499          (28,982)
30      Aug-01         226,513         138,205       88,308           69,566
31      Sep-01          25,737         108,423      -82,686          (64,622)
32      Oct-01         300,711         139,030      161,681          125,357
33      Nov-01               0         150,906     -150,906         (116,077)
34      Dec-01         406,624         122,966      283,658          216,461
35      Jan-02               0         112,147     -112,147          (84,902)
36      Feb-02             454,929            94,555           360,374         270,665
37      Mar-02             275,923            96,468           179,455         133,715
38      Apr-02                   0            79,595           -79,595         (58,838)
39     May-02              299,430            81,832           217,598         159,578       Summarize Net Cash Flow on Annual Basis:
40      Jun-02                   0            69,690           -69,690         (50,703)            Year      Net Flow
41       Jul-02                  0            64,688           -64,688         (46,691)      outflow        -3,729,372
42     Aug-02              340,864            89,689           251,175         179,860       inflow          6,269,997
43     Sep-02                    0            61,758           -61,758         (43,873)
44      Oct-02             174,747            57,350           117,397          82,739
45     Nov-02              154,969            66,018            88,951          62,194
46     Dec-02                    0            20,673           -20,673         (14,340)
TOTAL               6,269,997         3,729,372                         2,022,495

Economic Analysis on Monthly Basis:                                                               Economic Analysis on Annual Basis:
Project Rate of Return =>                       1176.86%                                                 68.12%
Net Present Value =>                            2,055,878                                         \$1,818,272.77 (2)
Monthly Cost of Investment =>                      0.80% (Annual Cost of Capital divided by 12)           9.58% (3)

* Per Oracle Report OAR800 - Billing and Receipt History
** Total Burdened Cost per Detail Dump of all Charges
Calculate Cost of Capital
Compare to Rate of Return

The following attributes are used to calculate Henson's Cost of Capital:

Risk free rate of return                           4.50%    (per Henson 2001 10-K Filing with the SEC)
Beta Factor                                          0.55   (per Yahoo Finance)
Market rate of return                             16.50%    (per review of 5 year returns from Value Line)
Interest Rate on Debt                              6.25%    (per Henson 2001 10-K Filing with the SEC)
Effective Tax Rate                                34.50%    (per Henson 2001 10-K Filing with the SEC)

Calculate Weighted Average Cost of Capital:
weighted
* B.V.    ** %'s              avg %
Cost of Equity         11.10%       592 78.31%                  8.69%
Cost of Debt            4.09%       164 21.69%                  0.89%
756 100.00%
Weighted Average Cost of Capital                      9.58%

* Book Values for Total Equity and Total Debt per 10-K Filing expressed in millions
** Market Value weights are suppose to be used, but in the absence of market values
for equity and debt, book value weights were used.
Summarize Cut Off Dates for Monthly Reporting Periods

FY 2000                FY 2001             FY 2002                FY 2003
Mo/Yr     Cutoff        Mo/Yr    Cutoff    Mo/Yr     Cutoff       Mo/Yr     Cutoff

Oct-99    10/29/1999   Oct-00 10/27/2000   Oct-01    10/26/2001   Oct-02    10/25/2002
Nov-99    11/26/1999   Nov-00 11/24/2000   Nov-01    11/23/2001   Nov-02    11/22/2002
Dec-99    12/31/1999   Dec-00 12/29/2000   Dec-01    12/28/2001   Dec-02    12/27/2002
Jan-00     1/28/2000   Jan-01  1/26/2001   Jan-02     1/25/2002   Jan-03     1/24/2003
Feb-00     2/25/2000   Feb-01  2/23/2001   Feb-02     2/22/2002   Feb-03
Mar-00     3/31/2000   Mar-01  3/30/2001   Mar-02     3/29/2002   Mar-03
Apr-00     4/28/2000   Apr-01  4/27/2001   Apr-02     4/26/2002   Apr-03
May-00     5/26/2000   May-01  5/25/2001   May-02     5/24/2002   May-03
Jun-00     6/30/2000   Jun-01  6/29/2001   Jun-02     6/28/2002   Jun-03
Jul-00    7/28/2000    Jul-01 7/27/2001    Jul-02    7/26/2002    Jul-03
Aug-00     8/25/2000   Aug-01  8/24/2001   Aug-02     8/23/2002   Aug-03
Sep-00     9/29/2000   Sep-01  9/28/2001   Sep-02     9/27/2002   Sep-03
Run Various Test to Verify Calculations

Compare Annual Calc's to Monthly Calc's - Should Not Vary Widely:
Year        Inflow      Outflow   Net
6/1/2002       90,000 180,000       -90,000             -180,000    90,000
12/1/2002 270,000 120,000           150,000              -120,000 270,000
Total          360,000 300,000                   20.00%
NPV            42,149           IRR             11%
Date                                                    XIRR       1.770035
Jan-00        7,500    15,000      -7,500
Feb-00        7,500    15,000      -7,500
Mar-00        7,500    15,000      -7,500
Apr-00        7,500    15,000      -7,500
May-00         7,500    15,000      -7,500
Jun-00        7,500    15,000      -7,500
Jul-00       7,500    15,000      -7,500
Aug-00         7,500    15,000      -7,500
Sep-00         7,500    15,000      -7,500
Oct-00        7,500    15,000      -7,500
Nov-00         7,500    15,000      -7,500
Dec-00         7,500    15,000      -7,500              -90,000
Jan-01       22,500    10,000      12,500
Feb-01       22,500    10,000      12,500
Mar-01       22,500    10,000      12,500
Apr-01       22,500    10,000      12,500
May-01        22,500    10,000      12,500
Jun-01       22,500    10,000      12,500
Jul-01      22,500    10,000      12,500
Aug-01        22,500    10,000      12,500
Sep-01        22,500    10,000      12,500
Oct-01       22,500    10,000      12,500
Nov-01        22,500    10,000      12,500              -90,000
Dec-01        22,500    10,000      12,500              150,000
NPV         \$43,396
Finance Cost                                                          Mo Rate
Cost of Capital            10.00% (used as reinvestment rate)             0.83%
Annual      Monthly
Regular Rate of Return                     67%         4%                             67%
Modified Rate of Return                      5%        2%
Irregular Payment IRR                    n/a      66.62%

USE THE IRR CALC IN BOLD FOR ALL RATE OF RETURN
CALCULATIONS ON ALL PROJECTS

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