$us vs sdl capex, page-6

Hey there Westcott,

I agree ex rates move both ways and can benefit or disbenefit a company. However, valuations are at an "as at" date.

There is a disconnect between what actually is paid for by a company and what is assumed in a forward DCF valuation. One is actual, the other is estimated.

An NPV calc makes assumptions as to ex. rate, discount rate, capex cost, FOB USD IO price etc. which will be snap shotted at a point in time. So some of the variables favour a higher ex rate and some favour a lower ex rate.

Overall for SDL, a lower AUD will benefit the NPV, as SDL is such a long term proposition.