Net Present Value (finance spoddery)

[DANIEL.DAVIES at flemings.com]

Depreciation shurely not a cash item, & thus irrelevant to a Net Present
Value calculation?  Although I must say that this "NPV over the first ten
years" concept seems a bit strange to me.  NPV is not a flow concept.

dd

)))))))))))))))

It sounds like the $11 mill refers to the net present value of
in-go and out-go over the first ten years.  To calculate this you
need to know at least three things:  the stream of income from
the asset, the expenses associated with earning this income, and
the depreciation of the asset.  You have not supplied enough
information to do the problem.  You speak of two "blips", but you
do not state the counter-factual to the blips -- the 'normal'
in-go, out-go, and depreciation.

[snips]

If you're trying to replicate the company's number, you need to
know how they depreciate, along with their numbers for in-go and
out-go.

mbs

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