The final PSC will comprise of cash flows over the period of the project set out in a spreadsheet and will include:
a) Costs and income arrived at to construct the initial PSC.
b) Impact on the cash flows arising from the risk analysis (the time impact on these cash flows needs to be taken into consideration).
The Work Team shall then discount these net cash flows using a discount rate that reflects the Government's cost of borrowing capital for a similar period as the duration of the project. The discount rate for the purposes of the VFM analysis shall be obtained from NCP. Using this discount rate, the Work Team shall calculate the net present value (NPV) resulting from the PSC financial model cash flows.