Stage 11 (2021) “In the Pipeline”

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Stage 11 (2021) "In the Pipeline"

In the Pipeline

In the Pipeline is an actual case from the Financial Modeling World Cup 2021, Stage 11 (November 19-22) competition. This is a typical freestyle case. You are tasked with finding the financially optimal location for a hot water heating generator for an imaginary town Modelville.

Case description:

As the manager of a potential district heating project, the main objectives are to find the optimal location of the generator, figure out how to optimally build pipelines across Modelville to reach customers, and make as high a return as possible. This should be done by building an annual cash flow model with 1 year of construction and 20 years of operation, taking into account the operating cash flows for revenues, costs, and capex.

The problematic of the case is to determine whether or not to build a pipeline to each of the ten potential customers by considering the economics of building either a shallow or deep pipeline to them. If a customer is too far away from the generator, it may not be economically viable to build a pipeline to them, in which case a pipeline should not be built. The WACC of the project must be calculated based on the costs of debt and equity given in the model, with 75% of the project being financed by debt and the remaining 25% by equity.

The downloadable file consists of the following:
Task: PDF file with Case Materials; PDF file with Questions; Excel file with Case Assumptions
Solution: Excel file with full Solution Model; PDF file with correct Answers in Bold

This model awarded 500 regular points + 150 Extra Points for the bonus questions, while the whole 2h Stage allowed to earn 1,150 points in total.

For your questions/suggestions/consideration please reach out to the Organizing Committee of the Financial Modeling World Cup at
You can also buy tickets to participate in the future FMWC Stages here.


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