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Coal is the biggest Cost but provides the best profit margin?

Cutting Carbs - Divestiture in the Electrical Power Market

Most recent answer on Jul 17, 2022

gave the best answer on Jul 17, 2022

Hi Peter, Coal does not provide the best profit margin One mistake here :) Colum 2 is total production. It has nothing to do with margins. Column 3 is the operational cost per MwH. There are literally no calculations yo ... (read entire answer)

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724
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16
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on Jul 17, 2022 on Jul 17, 2022
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Calculation on NPV: Why use "operational cost/10%" instead of "operational cost/(1+10%)"?

Cutting Carbs - Divestiture in the Electrical Power Market

Most recent answer on Apr 27, 2021

Anonymous B gave the best answer on Apr 27, 2021

The division over 10% assumes a perpetuity. By dividing over 10% you're calculating the value of all future annual cash flows, whereas by a division over (1+10%) you would only calculate the value of one annual cash flo ... (read entire answer)

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2.6 k
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31
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on Apr 27, 2021 on Apr 27, 2021
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Why are the operating costs considered as increasing cashflow 1:1? (and why are revenues not considered?)

Cutting Carbs - Divestiture in the Electrical Power Market

Most recent answer on Apr 17, 2021

gave the best answer on Apr 17, 2021

Hi there, This is a great question and a fair point! I would recommend including this in your risks bucket in your final recommendation. However, please never forget that in every single case, you need to focus on ( ... (read entire answer)

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1.3 k
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17
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on Apr 17, 2021 on Apr 17, 2021
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NPV calculation - why have you divided 2.5bn FCF by 10%? I understand this is TV calc. but why 10%?

Cutting Carbs - Divestiture in the Electrical Power Market

Most recent answer on Mar 08, 2021

gave the best answer on Mar 04, 2021

Hi there, Absolutely fair question! For this case (and most cases where you have to value future cash flows/costs), you need to use NPV. When using NPV, we must pick a discount rate. The "case standard" for discou ... (read entire answer)

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2.3 k
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60
Total Upvotes

on Mar 08, 2021 on Mar 08, 2021
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Consulting Q&A – Ask Questions about Your Career

In this overview, you will find all the questions asked so far by the PrepLounge community. Anyone can ask questions and write answers. Our coaches are also happy to share their expertise. If you like an answer, give it an upvote so that it rises to the top. Here you can also find our guidelines and FAQs for the Consulting Q&A.