Page 150 - The Green Building Bottom Line The Real Cost of Sustainable Building

GREEN IS THE COLOR OF MONEY 129

Let’s now assemble all of this data into a ten-year discounted cash flow statement
to get an overall picture of whether our investment in becoming a green company
has, in fact, paid off. In keeping with the conservative methodology of the previous
chapters, we have restricted income and revenue production to the latter years of this
ten-year analysis (Years 6 through 10), while front-ending much of the costs (see
Figure 4.1).
As shown in Figure 4.1, initial expenses of $1.563 million to manage the learning curve
of becoming a sustainable company are more than offset by the value creation that occurs
in the later years of analysis (approximately $7.1 million, for a net positive income of $5.5
million over ten years). The net present value of the overall investment in time, money, and
experience is positive, amounting to $2.1 million, and the internal rate of return (IRR) of
34.5 percent is well above Green, Inc.’s minimum threshold of 15 percent.

OT
10
3 3 4 5 6 7 8 9 10 TOTALS
ALS
29,000
29,000
29,000
29,000
29,000
145,000
0 0 0 29,000 29,000 29,000 29,000 29,000 145,000
187,500
187,500
937,500
187,500
187,500
187,500
187,500 187,500 187,500 187,500 187,500 937,500
50,000 50,000 50,000 50,000 50,000 250,000
250,000
50,000
50,000
50,000
50,000
50,000
38,187
37,346
32,475 37,346 38,077 38,187 146,085
38,077
32,475
146,085
450,000
0 0 0 450,000 450,000 450,000 450,000 450,000 2,250,000
450,000
450,000
2,250,000
450,000
450,000
0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0
67,500
1,519
79,372
228
0 0 0 0 67,500 10,125 1,519 228 79,372
10,125
67,500
79,144
0 0 0 0 0 67,500 10,125 1,519 79,144
10,125
1,519
77,625
10,125
67,500
0 0 0 0 0 0 67,500 10,125 77,625
67,500
67,500
67,500 67,500
150,000
0 0 0 150,000 150,000 150,000 150,000 150,000 750,000
750,000
150,000
150,000
150,000
150,000
0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0
0 0 0 0 0 0 0
0 0 0 0 0 0
3,375
34,220
3,881
22,500
22,500 3,375 3,881 4,463 34,220
4,463
29,756
3,881
3,375
22,500
0 22,500 3,375 3,881 29,756
25,875
3,375
22,500
0 0 22,500 3,375 25,875
0 0 0 22,500 22,500
22,500
22,500
1,250,000 1,250,000
1,250,000
1,250,000
936,258
187,500 215,625 247,969 285,164 936,258
247,969
215,625
187,500
285,164
1,176,475
7,080,834
0 0 0 2,1 16,500 1,176,475 1,222,971 1,261,446 1,303,442 7,080,834
2,116,500
1,261,446
1,303,442
1,222,971
(49,000)
(49,000)
(890,000)
(890,000) (57,000) (1,514,000)
(1,514,000)
(57,000)
(890,000) (57,000) 0 (1,563,000)
(890,000)
(57,000)
(1,563,000)
1,303,442
1,222,971
2,1
16,500
1,261,446
(890,000) (57,000) 0 2,116,500 1,176,475 1,222,971 1,261,446 1,303,442
1,176,475
(57,000)
(890,000)
0.513
0.751 0.683 0.621 0.564 0.513 0.467 0.424 0.386
0.564
0.751
0.386
0.424
0.467
0.683
0.621
534,976
603,718
502,533
(668,670)
1,194,709
570,525
(38,932)
(668,670) (38,932) 0 1,194,709 603,718 570,525 534,976 502,533