some company value calculations, page-57

Jamiebook,

You stated:
"highly improbable cost of $37/lb".

From that statement alone I think I can safely assume that you do not have a background in accounting and finance. The costing of $37/lb was taken from the Hartleys latest report and relates to TOTAL PROJECT AND COMPANY COSTS/ lb in 2014 when PEN is forecast to produce 1.45mlbs/annum. The reason it is higher than the Project C3 cost of $30/lb is because C3 only takes into consideration TOTAL PROJECT COSTS. $37/lb takes into consideration Project Costs AND General Admin and General Corporate costs as well. I really don't think the likelihood of PEN incurring General admin and Corporate expenses is 'highly improbable'. All companies incur such expenses and to attempt to perform a valuation of a Company without taking those expenses into consideration is flawed and incomplete.

If you were simply trying to value Lance, then using C3 costs of $30/lb would be appropriate and not $37/lb. C1, C2 & C3 are just different categories of costs that relate to a project for management and cost accounting purposes. C3 simply relates to TOTAL COSTS relating to a project and must be used when valuing a project. Using C1 or C2 would again be incorrectly understating and leaving out certain expenses.

Hope that explains it a bit better.