IBG 0.00% 0.4¢ ironbark zinc ltd

Okay, it seems like you weren't trolling and actually don't...

  1. 111 Posts.
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    Okay, it seems like you weren't trolling and actually don't understand the concept of NPV. I'll explain it to you nicely.

    See on the BFS where it says 8% as a subscript to NPV? This indicates that the NPV was calculated with a discount rate of 8%. This is, in effect, the "required rate" of return assumed by the project. To put it in more understandable terms for you, if the ivestor decided, instead of investing in this zinc project, they would deposit $654m in the bank which was astoundingly, offering the investor a 8% interest rate. The NPV of this investment discounted at 8% would be $0. That's right, $0, because the 8% discount rate used to calculate the NPV directly cancels out with the interest the investor receives.

    In other words, an NPV (at 8% discount) of $363m
    represents the excess value the investor receives from the investment, compared to investing in the bank deposit at 8% interest. Do you see why it's a good investment now?
    Last edited by Otgkb: 20/07/21
 
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