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Jake's point on RFA tags is completely valid and I think RFA retained players should be kept on the number of years the tagging team decides. It should be simple to work out the dollars they have to pay if the number of years they want is less than the winning bid, with a simple conversion of some kind. RFA tagging is an important revenue based advantage.
I really like the PV idea, but it is a bit complicated. Is it possible to implement some sort of PV calculator in Excel?(Of course, we also need to construct some sort of a yield curve...)
Colby: +1 year = 90% of previous bid => 171% interest rate...I don't think that too realistic.Interest Rate 171% Year Value PV Cum. PV Change in % Cum PV1 10 3.688376822 3.688376822 2 10 1.360412358 5.048789181 73.05%3 10 0.501771341 5.550560522 90.96%4 10 0.185072178 5.7356327 96.77%5 10 0.068261593 5.803894294 98.82%Avg 89.90%