Excellent Economics!

Now, I may be really stupid or something, but at first I couldn’t quite understand how a project saving £1.7 million per year over 10 years would save £200 million in total. You see, being a simpleton, I thought Jonesy was saying 1.7 x 10 = 200.

Luckily me mate Albert Einstein is an accountant, and he explained it all to us last night, down at the Dog & Duck. He started by droning on about this thing called economics, and inflation and discounting and investment returns and opportunity costs and all that sort of stuff.

Huh? We stare at Al as if he’s dropped in from another planet.

“Look,” says Al, “a regular cash flow of £1.7 million per year, with a compound return of 43.3% over a ten year period, would give you £200 million.”

“Cut it OUT Al!” says I. “Give it to us straight. You know, like Jonesy says, in a way that real people can understand!”

“OK,” says Al. “How much is your house worth?”

“Well,” says I, “last year it was valued at £200,000.”

“OK,” says Al. “Now get this, if Jonesy’s economic forecast is correct, by the end of the SCC/IBM contract your house will be worth £7.3 million!”

And as the Spaghetti Monster is my witness, Your Honour, that is how I came to put the deposit on a Lear Jet.