Project Finance and Excel - Build Financial Models from Scratch - Building the Amortization Table

The video tutorial explains how to compute amortization values in a financial model. It begins by reviewing assumptions from a PDF document, then guides through setting up a spreadsheet for depreciation and amortization. The tutorial covers calculating asset values during the construction phase, applying formulas for linear amortization, and ensuring the accuracy of calculations. The process involves dividing total asset value over the operational period and verifying results against initial assumptions.

What is the main assumption for amortization mentioned in the PDF document?

• Amortization is only applied during the construction phase.

• Amortization is calculated using a double-declining method.

• Amortization is done on a linear basis over the concession term.

• Amortization is based on a declining balance method.

During the construction phase, how is the asset value affected?

• The asset value remains constant.

• The asset value increases as new assets are built.

• The asset value is written off completely.

• The asset value decreases due to amortization.

When does amortization begin according to the assumptions?

• During the construction phase.

• At the end of the concession period.

• After the first year of construction.

• From the start of the operational period.

How is the amortization value calculated for the operational period?

• By dividing the total investment by the construction duration.

• By dividing the total investment by the operational duration.

• By multiplying the total investment by the operational duration.

• By adding the total investment to the operational duration.

What is the purpose of the sum function in the amortization calculations?

• To find the maximum asset value during the operational period.

• To determine the minimum asset value at the end of the period.

• To calculate the average asset value over the years.

• To ensure the total amortization matches the total asset value.

What happens to the asset value at the end of each period?

• It remains unchanged.

• It is reset to zero.

• It is increased by the amortization value.

• It is decreased by the amortization value.

Why is there no amortization during the construction phase?

• Because the assets are fully depreciated.

• Because the assets are not valuable.

• Because the assets are not yet operational.

• Because the assets are sold off.