Page 127 - The Green Building Bottom Line The Real Cost of Sustainable Building

106 CHAPTER 3

ears
Y Years 0 1 2 3
REVENUES
REVENUES
Shaping values, chapter 1
21,300
21,300
Shaping values, chapter 1 21,300 21,300 21,300
21,300
r
eo
fg
Cr
Creating a culture of green glue, chapter 22 79,000 79,000 79,000
eating
cultur
a
chapter
79,000
79,000
79,000
glue,
een
een
3,300
Gr
Green from the inside out, chapter 3 3 0 3,300 3,300 3,300
3,300
the
out,
inside
chapter
3,300
fr
om
een,
Inc.
Gr
of
Sale
Sale of Green, Inc.
103,600
103,600
Total Revenuesotal Revenues 103,600 103,600 103,600
103,600
EXPENSES
EXPENSES
Shaping values, chapter 1 (166,000) (1 (114,500) (91,875) (97,286)
(166,000)
14,500)
Shaping values, chapter 1
(91,875)
(97,286)
(64,631)
(72,717)
een
r
fg
eo
Cr
Creating a culture of green glue, chapter 22 0 (57,600) (64,631) (72,717)
eating
(57,600)
chapter
glue,
cultur
a
(78,490)
chapter
(22,998)
inside
out,
the
(22,381)
fr
een
Green from the inside out, chapter 3 3 0 (78,490) (22,381) (22,998)
Gr
om
(166,000)
Total Expensesotal Expenses (166,000) (250,590) (178,888) (193,002)
(193,002)
(250,590)
(178,888)
(75,288)
(89,402)
Total Cashflowotal Cashflow (166,000) (146,990) (75,288) (89,402)
(146,990)
(166,000)
Discount Factor 1.000 0.909 0.826 0.751
0.826
1.000
0.751
Factor
Discount
0.909
(133,627)
Cashflow
PV
(62,221)
PV Cashflow (166,000) (133,627) (62,221) (67,169)
(67,169)
(166,000)
NPV 132,127
NPV
132,127
IRR
IRR 13.98%
13.98%
Figure 3.6 Amalgamated data for Green, Inc.
If we amalgamate the data from our discussion in this chapter with the costs and
benefits analyzed in the previous two chapters, we find that the total investment in
green—values, culture, and internal operations—still shows net positive discounted
cash flow of $132,000 over ten years, with an internal rate of return of 13.98 percent
(see Figure 3.6).
This return of 13.98 percent is now below our hurdle rate of 15 percent—not great
news, of course, but hardly cause for much alarm. For one thing, it is the collective
view of our writing team that we have, in fact, greatly understated the benefits of green
in the interest of providing a conservative real-case study of a green bottom line.
Moreover, the story is far from complete. We still need to consider the costs of creat-
ing a whole company of folks who are expert in green development—as well as the
benefits that accrue to such an investment in working our way up the green learning
curve—to which we turn our attention in Chapter 4.
NOTES
1
Robert F. Kennedy, Jr., Crimes Against Nature: How George W. Bush and His Corporate Pals
Are Plundering the Country and Hijacking Our Democracy (New York: HarperCollins, 2004),
p. 184.
2 http://money.cnn.com/2006/08/07/news/international/oil_alaska/index.htm accessed 12/28/07.