| Course | IBF-5070 Financial Modeling |
|---|---|
| Module | Module 3 |
| Paper type | Module 3 written assignment: developing a corporate financial model |
| Length | About 646 words, 5 pages |
| Format | APA 7 student paper |
| School | Thomas Edison State University |
| Program | MBA in Finance |
| Updated | October 2026 |
Free sample paper for IBF 5070 Module 3
From 180 to 240 Megawatts: A Five-Year Corporate Model for Bayshore Renewables
Student Name
MBA in Finance, Thomas Edison State University
IBF-5070: Financial Modeling
Mentor Name
Month Day, Year
From 180 to 240 Megawatts: A Five-Year Corporate Model for Bayshore Renewables
Introduction
Bayshore's lenders have asked for a five-year plan before they approve financing for the Cumberland project. The corporate model must show how the company performs with and without the new project, how construction is paid for and whether cash flow covers debt service with room to spare. Following the structure set out in Module 1, every assumption sits on one input sheet and every calculation runs on one annual timeline. The model also has to be simple enough for a credit officer to review in an afternoon, so it projects annual figures only, with detail on the new project kept in the project model from earlier modules and linked by a single row of results. Esty (2004) notes that project finance places a single asset in its own company with non-recourse debt, which is why the new project's lenders will look mainly at its own cash flow.
Timeline and Key Assumptions
The timeline runs annually from 2025 to 2029, with a flag that switches Cumberland's revenue on in 2027, after an 18-month construction period.
General and administrative costs start at $3.0 million and rise 3 percent a year. Generation figures come from the independent engineer's P50 estimates, prices from existing contracts and the Cumberland term sheet.
| Assumption | Existing fleet | Cumberland |
|---|---|---|
| Capacity | 180 MW | 60 MW |
| First-year generation | 315,360 MWh | 110,376 MWh |
| Annual degradation | 0.5% | 0.5% |
| Average price, first year | $62 per MWh, rising 2% a year | $70 per MWh contract, rising 2% a year |
| Operating costs, first year | $7.2 million, rising 2.5% | $2.5 million, rising 2.5% |
| Construction cost | None | $93.6 million in 2026 |
Projections
Revenue rises by about 40 percent in 2027 when Cumberland begins operating, and EBITDA by more than half, because the project's operating costs are low relative to its revenue. Without Cumberland, EBITDA would stay near $9.4 million and drift down slowly as panels degrade, since price escalation barely outpaces cost growth.
| $ millions | 2025 | 2026 | 2027 | 2028 | 2029 |
|---|---|---|---|---|---|
| Revenue | 19.6 | 19.8 | 27.9 | 28.3 | 28.7 |
| Operating costs | (7.2) | (7.4) | (10.1) | (10.3) | (10.6) |
| General and administrative | (3.0) | (3.1) | (3.2) | (3.3) | (3.4) |
| EBITDA | 9.4 | 9.4 | 14.6 | 14.7 | 14.8 |
| Capital expenditures | (0.4) | (93.6) | (0.5) | (0.5) | (0.5) |
From Pretax Cash Flow to Free Cash Flow
Pretax cash flow is EBITDA less capital expenditures and changes in working capital, which are small for a power producer paid monthly. After-tax free cash flow then deducts cash taxes. Bayshore pays little cash tax in these years because accelerated depreciation on solar equipment, five-year MACRS, creates tax losses that offset income. Cumberland's 30 percent investment tax credit, about $28 million, is realized when the project enters service in 2027; under the Inflation Reduction Act, Bayshore can sell the credit to an unrelated taxpayer for cash, an assumption the model shows at 92 cents per dollar of credit, or about $25.8 million.
Allocating Free Cash Flow
Construction in 2026 is funded with $40 million of project debt, $25 million from the expected credit sale through a bridge loan repaid in 2027 and the rest from Bayshore's cash and a sponsor equity contribution. From 2027, free cash flow is allocated in order: operating costs and taxes, debt service on fleet and project loans, a six-month debt service reserve and then distributions to owners. Bodmer (2015) notes that showing this order explicitly lets lenders see that they are paid before owners. Gatti (2018) explains that reserve accounts protect lenders against short-term shortfalls in output, such as a poor solar year.
Conclusion
The model shows Bayshore growing from 180 to 240 MW, with EBITDA rising from $9.4 million to about $14.8 million once Cumberland operates. Construction is financed with project debt, a tax credit sale and equity, and free cash flow after 2027 covers debt service before owners receive distributions. The next modules test how much these results depend on the assumptions.
References
Bodmer, E. (2015). Corporate and project finance modeling: Theory and practice. Wiley.
Esty, B. C. (2004). Why study large projects? An introduction to research on project finance. European Financial Management, 10(2), 213-224. https://doi.org/10.1111/j.1354-7798.2004.00247.x
Gatti, S. (2018). Project finance in theory and practice: Designing, structuring, and financing private and public projects (3rd ed.). Academic Press.
IBF 5070 Module 3 instructions, in plain terms
The third IBF-5070 written assignment asks you to develop a corporate financial model that projects revenues, expenses and capital expenditures. Expect to set up a timeline, state assumptions with sources, build projections and show how pretax cash flow becomes after-tax free cash flow and how that cash is allocated. Many students submit the spreadsheet with a written explanation. Present the key assumptions and projections in tables, explain what drives the main changes and show the steps from EBITDA to free cash flow. If your company is adding a project or product, show results with and without it. Lenders and boards read the narrative before the spreadsheet, so make the explanation stand on its own. If your company is not in energy, the same structure applies: drivers of volume and price, cost lines, capital spending and the path to free cash flow.
How the IBF 5070 Module 3 example is put together
The paper introduces the model's audience and purpose, lenders deciding on financing. An assumptions table sets out capacity, generation, prices, costs and construction for the fleet and the new project. A projections table shows five years of revenue, costs, EBITDA and capital spending, and the text explains the jump when the project comes online. A cash flow section explains depreciation, the investment tax credit and its sale. An allocation section sets out the financing of construction and the order in which cash is paid, with support from Esty's research on project finance and from Gatti. The projections are rounded to one decimal place, and every figure can be traced to the assumptions table. The paper also explains what happens without the new project, so the increment is clear.
Where the marks sit in the IBF 5070 Module 3 rubric
Mentors grade this assignment on a well-structured model with a clear timeline, reasonable and sourced assumptions, correct projections, accurate treatment of taxes and free cash flow, and a clear explanation of cash allocation. Answers that explain what drives each projection, rather than only presenting it, show understanding. Showing results with and without a new investment demonstrates the model's use for decisions. Correct handling of depreciation and tax credits adds technical credit, and tables with consistent units make the projections easy to check. Papers that explain tax effects such as accelerated depreciation and credits, and their timing, earn credit for technical accuracy. Mentors also check that construction financing adds up to the construction cost, and that the order of payments is consistent with lender protections.
IBF 5070 Module 3 help: mistakes that cost marks
Students lose points by projecting revenue with a single growth rate and no drivers, by mixing pretax and after-tax figures or by omitting how cash is allocated. Others forget capital expenditures or working capital. Build revenue from volume and price. Show the steps from EBITDA to free cash flow explicitly. Explain the order of payments to lenders and owners. State the source of each major assumption and keep units consistent across tables. Make sure construction-year sources equal uses and that no negative cash balance slips through without a funding line. A free first sample on your own IBF-5070 Module 3 model is available on request.
Write yours, or have the desk draft it
This paper is an original model document written by our desk, not a submitted student paper and not an official Thomas Edison State University document. Read it for the moves, then write your own to the instructions in your classroom. If you want one built to your exact prompt and rubric, the first custom sample is free and arrives in 24 to 48 hours.
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IBF 5070 Module 3 questions, answered
Where can I find a free IBF 5070 Module 3 sample paper?
Bayshore's five-year corporate forecast, with free cash flow and how it is allocated, appears above.
How is after-tax free cash flow calculated?
EBITDA less capital expenditures, changes in working capital and cash taxes.
Why show results with and without a new project?
It separates the existing business from the increment a decision would add, which lenders and boards need to judge.
What is a cash flow waterfall?
The order in which cash is paid: operating costs and taxes, debt service, reserves, then distributions to owners.
Can a solar company sell its investment tax credit?
Yes. Since the Inflation Reduction Act, many clean energy credits can be transferred to an unrelated taxpayer for cash.