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<br />88
<br />Page 36
<br />
<br />6.000,000 1''.-----:- -- ." -'-'-'-"-':-5:918~754--" .... .-. -.. ..I Fiaure B
<br />5.918.754
<br />
<br />.. 5,402,840
<br />
<br />1-......-.-.-...--..............--...-..-.-.----....-.-.-..-.-.-...-.....-....-...--:
<br />
<br />l
<br />'a.
<br />a.
<br /><
<br />f 5.000.000
<br />..
<br />.c
<br />III
<br />.
<br />:l
<br />C
<br />..
<br />>
<br />.
<br />0::
<br />~
<br />'ti
<br />o
<br />E
<br />g
<br />(,)
<br />= I
<br />i I
<br />~ 3,000.000 1
<br />:
<br />! I
<br />I
<br />
<br />2.000.000
<br />
<br />4,000,000 I
<br />
<br />m;:.-,..."................~............~...-..."........,..,....,.....,. ,,~.,...,'^',.,' ,....""......."..,.",."~,.".."..,',,..,.,',.,..,... ",,,,,,..,..1&--" ..........-,..... ..,' ., ,......,t~. 4.887,464
<br />4,887.464 4,887.464
<br />
<br />. 4,334,084
<br />
<br />. 3.781,367
<br />
<br />it.
<br />3.608,864;
<br />
<br />2,502,654
<br />
<br />$0.00
<br />
<br />$85.98
<br />
<br />$94.14 $102.29 $111.04
<br />Commodity Price per Ton
<br />
<br />$119.78
<br />
<br />$140.00
<br />
<br />1<<1Ii-'HBC '. SB~:
<br />
<br />Commodity Sale Price
<br />
<br />The previous analysis provided a framework from which to determine the value of the Revenue
<br />Guarantees offered by HBC and SBR. It has identified three points at which commodity prices
<br />can make a difference in the financial evaluation of the two proposers (see Figure C). At a
<br />commodity price of $102.29 per ton, the proposals are financially equal. At commodity prices
<br />below $102.29 per ton, HBC provides a better financial option for the SBWMA. The maximum
<br />financial benefit of HBC's Revenue Guarantee is realized when commodity value is at or below
<br />$85.98 per ton. At the other end of the spectrum, at commodity prices above $102.29 per ton,
<br />SBR's proposal is financially better with a maximum financial benefit realized at or above
<br />$119.78 per ton. The one remaining factor is to determine what commodity prices will be during
<br />the life of the contract.
<br />
<br />I Fiaure C - Commodity.Sale Price ImDact
<br />
<br />CDmmodlty Price
<br />per Ton
<br />
<br />
<br />$85.98< > $102;29 $102.29
<br />
<br />I $102.29<> $119.78
<br />
<br />
<br />Outcome
<br />
<br />At any price
<br />below $85.98
<br />HBC is less
<br />costly by
<br />$1.032M year.
<br />
<br />As the commodity
<br />value drops from
<br />$102.29 to $85.98
<br />HBC becomes less
<br />costly.
<br />
<br />Both
<br />proposals
<br />are eaual in
<br />cost.
<br />
<br />As the commodity
<br />value increases from
<br />$102.29 to $119.78
<br />SBR becomes less
<br />costly.
<br />
<br />At any price
<br />above $119.78
<br />SBR is less
<br />costly by
<br />$1.106M year.
<br />
<br />SBWMA ~ EC Report
<br />
<br />Page
<br />18
<br />
<br />1/16/2009
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