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Northwest Seaport Alliance Discount Rate and Net Present Value March 5, 2020 2/25/2020 1 Item No.: 6A_supp Date of Meeting: Mar 5, 2020

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Page 1: Northwest Seaport Alliance Discount Rate and Net Present …...Net Present Value Focuses on discounted cash flows Includes: Acquisition costs, project costs, revenue and expenses Opportunity

Northwest Seaport Alliance

Discount Rate and Net Present Value

March 5, 2020

2/25/2020 1

Item No.: 6A_suppDate of Meeting: Mar 5, 2020

Page 2: Northwest Seaport Alliance Discount Rate and Net Present …...Net Present Value Focuses on discounted cash flows Includes: Acquisition costs, project costs, revenue and expenses Opportunity

Background

As borrowing rates have decreased the question has been asked if the discount rate used for financial analysis (currently 8.4%) should be reduced

2/25/2020 2

Page 3: Northwest Seaport Alliance Discount Rate and Net Present …...Net Present Value Focuses on discounted cash flows Includes: Acquisition costs, project costs, revenue and expenses Opportunity

Introduction

2/25/2020 3

Page 4: Northwest Seaport Alliance Discount Rate and Net Present …...Net Present Value Focuses on discounted cash flows Includes: Acquisition costs, project costs, revenue and expenses Opportunity

Primary Project Financial Considerations

2/25/2020 4

Page 5: Northwest Seaport Alliance Discount Rate and Net Present …...Net Present Value Focuses on discounted cash flows Includes: Acquisition costs, project costs, revenue and expenses Opportunity

Secondary Project Financial Considerations

2/25/2020 5

Page 6: Northwest Seaport Alliance Discount Rate and Net Present …...Net Present Value Focuses on discounted cash flows Includes: Acquisition costs, project costs, revenue and expenses Opportunity

Time vs Project Based Measures

2/25/2020 6

Page 7: Northwest Seaport Alliance Discount Rate and Net Present …...Net Present Value Focuses on discounted cash flows Includes: Acquisition costs, project costs, revenue and expenses Opportunity

Discount Rate Methodology & History

2/25/2020 7

Page 8: Northwest Seaport Alliance Discount Rate and Net Present …...Net Present Value Focuses on discounted cash flows Includes: Acquisition costs, project costs, revenue and expenses Opportunity

2020 What If Scenario

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Page 9: Northwest Seaport Alliance Discount Rate and Net Present …...Net Present Value Focuses on discounted cash flows Includes: Acquisition costs, project costs, revenue and expenses Opportunity

Financial Standards Considerations

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Page 10: Northwest Seaport Alliance Discount Rate and Net Present …...Net Present Value Focuses on discounted cash flows Includes: Acquisition costs, project costs, revenue and expenses Opportunity

Financial Standards Considerations

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Page 11: Northwest Seaport Alliance Discount Rate and Net Present …...Net Present Value Focuses on discounted cash flows Includes: Acquisition costs, project costs, revenue and expenses Opportunity

Financial Standards: Recommendation

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