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  #21  
Old 10-06-2015, 03:27 PM
LordPrettyFlacko LordPrettyFlacko is offline
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Originally Posted by Broner View Post
^

Adjust your model then. Whatever assumptions you make, justify them in your report.
This.

I've removed almost $5 million in costs (assuming a 0% effective interest rate) and keep coming up with an inflation rate of about 2.4%, which is not within the economist's estimates of 3-6%. I haven't even gotten to the sensitivity tests because I've been spinning wheels here.

I have a good feeling that the contingency needs to be raised. The 15% contingency mentioned in the first question is not necessarily gospel. It's mentioned in the introduction to keep in mind if the contingency is a "sufficient and reliable" one, which seems like a wink from the SOA. Raising the contingency to 20% has me coming up with a 3.14% inflation rate, which is within their projections, and looks more realistic when raised higher.

Or I guess the only thing I can do is say that the economists are wrong, Can-Do should fire them, and state that I'm pretty sure that the inflation rate is supposed to be in the 1-3% range; Can-Do just hired incompetent economists.
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  #22  
Old 10-22-2015, 10:40 PM
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yellow pig yellow pig is offline
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Quote:
Originally Posted by LordPrettyFlacko View Post
This.

I've removed almost $5 million in costs (assuming a 0% effective interest rate) and keep coming up with an inflation rate of about 2.4%, which is not within the economist's estimates of 3-6%. I haven't even gotten to the sensitivity tests because I've been spinning wheels here.

I have a good feeling that the contingency needs to be raised. The 15% contingency mentioned in the first question is not necessarily gospel. It's mentioned in the introduction to keep in mind if the contingency is a "sufficient and reliable" one, which seems like a wink from the SOA. Raising the contingency to 20% has me coming up with a 3.14% inflation rate, which is within their projections, and looks more realistic when raised higher.

Or I guess the only thing I can do is say that the economists are wrong, Can-Do should fire them, and state that I'm pretty sure that the inflation rate is supposed to be in the 1-3% range; Can-Do just hired incompetent economists.
yup got around 2.5% as well just finally am about to submit mine - about 3 full pages in Word plus the Excel spreadsheet

but for the walk-away point I looked at not only all the sensitivities but other adverse risks such as the current mine that Can-Do owns would have their operating costs reduced by less than the $30M predicted
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  #23  
Old 01-29-2019, 06:29 PM
Squeenasaurus Squeenasaurus is offline
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any thoughts on if the cost saving also increase for the additional long term years that are increased in the sensitivity. if so, having more years for long term is better than the baseline.
They don't mention that anywhere in the memo. He says savings will occur over the next 20 years. Nothing about the savings lasting longer than that. It's a good thought and I'll probably mention it in my report but I'm not sure we need to account for savings lasting longer than 20 years if they didn't tell us to.
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