Quote:
Originally Posted by Frequitude
I did. There's been almost 1000 posts in 18 hours...
I see "$750M over 35 years" simply as a positive relative to "$356M over 35 years", not as "OMG we totally got a good deal from CSEC" (hence the disclaimer that I'm still a detractor.
The 1%/yr increase is a red herring. Would it make you happier if it was $10M/yr increasing by 4.7% per year, simply because the 4.7 is a bigger number than 1.0? Because they have the exact same present value at a 5% discount rate...
All that really matters is to me is:
-total up front from CSEC
-total gross over 35 years
-discount rate (i.e. implied interest rate) to calculate the present value of their contribution
In this case, CSEC is getting an absurdly smoking deal that I don't like. They're basically only putting $40M into a $1.2B project.
The remaining $17M/yr should just be viewed as rent because they won't own the building so should be paying rent like anyone else who lives somewhere they don't own. And they'll make way more than an extra $17M/yr anyway.
We got bent over by a billionaire. But we were always going to. Everyone does.
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Sorry, not in finances so I didn't really grasp the discount rate.