+14+
+12+
+6+
FOREIGN LOAN BALANCE,
BOTH CONCEPTS
THOUSAND MILLION DOLLARS (CURRENT HK$)
+
+8
-- 2+
-6-
1975
1980
1985
1990
Figure 14 Debt Levels and Cash Flow
TOTAL CASH FLOW, CONCEPT A
TOTAL
CASH FLOW,
CONCEPT B
·LOCAL LOAN BALANCE,
CONCEPT B
1995
Two additional tests of financial soundness were made: (1) an estimate of the rate of return on fixed assets and (2) a present value revenue/cost comparison.
By January 1, 1985, the total assets of the new airport would amount to HK $5,585 million - HK $4,149 million classified as nondepreciable assets such as airport site and roadway foundations, and HK $1,436 million classified as depreciable assets such as runways, terminals, and roads. The annual rate of return, after allowance for depreciation, would be approximately 13% in 1985, not considering an airport profit tax, and would increase steadily. For the 10 years from 1985 to 1994, the rate of return would average approximately 19%; from 1985 to 1999, approximately 22%; and for the 20 years from 1985 to 2004, ap- proximately 23%. These returns indicate the financial soundness of the investment.
37
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