Macquarie and the UK Government have agreed a valuation of £1bn on the Green Investment Bank’s prized asset, Supermassive Made-up Offshore Windfarm. But two days before Macquarie’s acquisition of the Green Investment Bank is due to be signed, a group of pirates take control of the seas around the Offshore Windfarm, meaning that maintenance ships will be less reliable if they needed to carry out repairs. Supermassive Made-up Offshore Windfarm • Is still expected to generate the same amount of electricity (3 million units a year) and achieve the same price for those units (£100 per unit), and is still expected to have the same operating profit margin (75%) and tax level (20%). There is no debt • Is still expected to operate for 10 years from the date of acquisition • Is now more risky because if something goes wrong there is no guarantee of repairs Macquarie and the UK Government therefore agree that the rate of return to be achieved by Macquarie should be higher by 2% -find the originally expected rate of return implied by the £1bn valuation using Excel’s IRR function -find the new valuation at the new rate of return by using Excel’s NPV function (note, NPV function assumes first cashflow happens in 1 year)
Macquarie and the UK Government have agreed a valuation of £1bn on the Green Investment Bank’s prized asset, Supermassive Made-up Offshore
Windfarm.
But two days before Macquarie’s acquisition of the Green Investment Bank is due to be signed, a group of pirates take control of the seas around the
Offshore Windfarm, meaning that maintenance ships will be less reliable if they needed to carry out repairs.
Supermassive Made-up Offshore Windfarm
• Is still expected to generate the same amount of electricity (3 million units a year) and achieve the same price for those units (£100 per unit), and
is still expected to have the same operating profit margin (75%) and tax level (20%). There is no debt
• Is still expected to operate for 10 years from the date of acquisition
• Is now more risky because if something goes wrong there is no guarantee of repairs
Macquarie and the UK Government therefore agree that the
-find the originally expected rate of return implied by the £1bn valuation using Excel’s
-find the new valuation at the new rate of return by using Excel’s
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