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Gold/Mining/Energy : Corner Bay Silver (BAY.T)

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To: Jon Matz who wrote (1861)4/12/2001 10:59:26 AM
From: Claude Cormier  Read Replies (1) of 4409
 
The NAV is the net asset value discounted at a specific rate.

<BAY can get all it's money back in a year of production, what do you mean by a 60% return on investment? That sounds like a 100% to me.>

Jon, if you spend $100M and pay it back in a year from cash flows, the net result is 0, you have gained nothing. What come next in the following years is the internal rate of return (IRR). Future cash flows must be discounted. A dollar earned 3 years down the road is not worth the same as a dollar earned today because of factors like inflation.

If you take the cumulative cash flows, discount them year after year and compare them to total investments and expenses over the period, then you get the true rate of return.

Claude.
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