# Commission Decision of 8 May 2012 on State aid SA.22668 (C 8/08 (ex NN 4/08)) (notified under document C(2012) 3025) (Only the Spanish text is authentic) (Text with EEA relevance) (2013/126/EU), Division 2: The relevant time frame

Extent: E+W+S+N.I.

In our previous analysis, we used the year 2004 as a reference year for the calculation of the NPV, as this was the time when the entire investment of EUR 199,4 million had been committed. However, we can easily duplicate our analysis for the year 2000. The resulting WACC would be higher than in 2004, due both to a higher market risk premium (which according to the information gathered by Fernández should be around 7 % — see section 1.1) and to a higher risk-free rate (which stood at 5,53 % for Spain in 2000). Hence, an internal rate of return of 8,84 % would still be much lower than the cost of capital (more precisely: WACC = 5,53 % + 1,59 * 7 % = 16,66 % ).
It is possible to go one step further and compute the NPV of the project in 2000. Bearing in mind all the caveats we stressed in our previous analysis (i.e., the use at face value of the cash flows and the parameters used for the calculation of the terminal value, except, of course, for the WACC) we obtain the following negative NPV:
2000
2001
2002
2003
2004
2005
2006
NPV
Cash flow
-46 479
-69 719
9 005
12 616
6 930
7 710
68 698
Discount
1
1/ 1 + WACC
1/ 1 + WACC ^2
1/ 1 + WACC ^3
1/ 1 + WACC ^4
1/ 1 + WACC ^5
1/ 1 + WACC ^6
16,66 %
1
0,8572
0,7348
0,6298
0,5399
0,4628
0,3967
DCF
-46 479
-59 762,56
6 616,67
7 946,13
3 741,5
3 568,16
27 252,87
-57 116,22

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Source: https://www.legislation.gov.uk/eudn/2013/126/annex/II/division/1/division/2 (the official version)
Page: https://openlegislation.uk/eu-decision-2013-126/annex-II/division-1/division-2
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.