Mirabela Nickel Ltd Ord MRBAF

RE: RE: RE: Operating cashflow

[brendelly]

Public Heal your not understanding the concept of NPV at all and 8% is not overly conservative, in fact 10% is very standard in the use of NPV.

NPV takes incorporates risk and inflation. The use of a 10 or 30 year bond (4.57%) is risk free and would be the absolute minimum discount factor in an NPV calculation, banks use this when analysing project loans (MNB does have debt). An NPV 8% is risk and inflation adjusted and is typically the lowest return an investor would expect. Many companies use a 15-20% hurdle in which it would be the minimum return a company looks for in a potential project. Its all about opportunity cost of money and used for the comparison of project, can I make a better return with less risk somewhere else. You will never see a company using NPV 5 as you can see that a 30 year bond can give you the same return risk free.