--- In AsburyPark@yahoogroups.com, "dfsavgny" <[EMAIL PROTECTED]> wrote:
>
> --- In AsburyPark@yahoogroups.com, "justifiedright"
> <justifiedright@> wrote:
> >
> Oy vey!
>
> >
> > No, I used what the other Dan S set up.
> >
> > Here are his assumptions from his post number 43285:
> >
> > "The present value of that stream of free cash flows (assuming a 10
> > year deal with a 10% rate of return to the investor would be 8.258
> > million.
>
> 10% (not 5% like you said)
>
> > After 10 years the meters would revert back to the town's
> > ownership. So using those numbers an investor would be willing to put
> > up 8.258 million to the town up front for the right to collect 1.344
> > million per year for 10 years."
> >
>
> I reiterate, $8.3M grows to $13M+ in 10 years at 5% (your rate)
>
> $8.3M grows to $21M+ in 10 years at 10% (Dan's rate)
>
> What is the problem?
>
The problem is he claims they will see only 13.4 million, not the 21
million you bring up.
That's why I'm pointing out that his assumption of a 10% rate of
return is wrong.
Back to the beginning again: To get to a 10% rate of return, the
present value rate will have to be dropped considerably in his
assumptions.
Or sell it at 5% - but since that is what you can get in a CD, you
won't sell it to anyone.
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