Quote:
Originally Posted by Bingo
10% is a pretty standard downtown Calgary capital hurdle for today. It was 15% as early as three years ago. I doubt prominent Calgarians would be that much different on their own holdings as they have access to investments that suggest it should actually be much higher.
Don't think anything is rigged. The model was run to solve for an unknown using a possible outcome of zero profit on 10% NPV, which to me is a logical starting point.
I'm happy to run any version of the non hockey related revenue though.
Have seen cost over runs on the building suggesting $600M on a few occasions.
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Sorry rigged was the wrong word. It's just that making the assumption of outside revenues related to NPV ensures that any contribution of the ownership more than that value will show as a poor investment.
Which is why I do not believe that the flames initial position would be the one that they find acceptable from an NPV point of view. Given that they will have to give up something to make a deal they wouldn't start at the break even hurdle. So they enter the negotiations at being break even on a 15% NPV but are willing to settle for 10.
So I guess my question would be assume that the owners offer breaks even using a 15% NPV what is the value proposition on the cities offer with a 10% NPV.