4 ms·

Here is some math: The formular for the present value of a perpetuity is just present_value := cashflow / discount_rate Given 750$ per month (9000$ per ye

by alegrn 12y ago

Here is some math: The formular for the present value of a perpetuity is just present_value := cashflow / discount_rate Given 750$ per month (9000$ per year) and a 3% annual discount rate, then an infinite stream of 750$ monthly payments is worth today 300.000$.

empressplay 12y ago
It's so totally not suspicious that an account that hasn't posted for over a year all of a sudden pops up to make a post in support of the author?
- alegrn 12y ago
  Nope, my post was just meant as some random fact. You can easily put a price on an infinite stream of constant payments. I don't believe the project is able to generate an infinite stream of 750$ payments. But if it could, that would be roughly it's value. By the way, for an investor it does not matter how much effort (1 year, 5 years, 100 years) the author did put into the project. For the present value of the project only matters what monthly payements there will be. If someone can forecast these payments, he can also put a price tag on the project. So it might also be, that there is no more interest in the game in one or two months ... then it would be roughly worth 0$ to 750$ (even if it took much effort to implement it).
  - punee 12y ago
    You probably also want to revise your discount rate assumption.
    - alegrn 12y ago
      Sure. The given assumed discount rate of 3% was just meant as an example.
- raphman 12y ago
  Huh? You are questioning the commenter's sincerity just based on how often they want to post a comment on HN. Witch-hunting does not really make HN a better place.
- PhasmaFelis 12y ago
  Are you accusing the author of using a sockpuppet account to...give himself financial advice?
vacri 12y ago
The computer gaming market doesn't function like most other markets; the idea of considering that monthly income as recurring indefinitely is rather odd.
- alegrn 12y ago
  Of course, You are absolutely right. The author said he had no idea how to value his work and I was thinking... Hmm, he might try to use financial math formulas such as the NPV as help. If the game makes $9000 profit per year at a discount rate of 3% you could value it: $8738 ... (makes profit for N years, where N = 1) $17221 ... (makes profit for N years, where N = 2) $25458 ... (makes profit for N years, where N = 3) $41217 ... (makes profit for N years, where N = 5) $76772 ... (makes profit for N years, where N = 10) $133897 ... (makes profit for N years, where N = 20) $284390 ... (makes profit for N years, where N = 100) And no software is able to make profit for 100 years. (disclaimer: my calculation might of course be wrong, I didn't put much thinking into it)
- stefan_kendall3 12y ago
  There are few who can make this happen. If you're not minecraft or a subscription/in-app-purchase game, you're out of luck.

by alegrn 12y ago

empressplay 12y ago

It's so totally not suspicious that an account that hasn't posted for over a year all of a sudden pops up to make a post in support of the author?

alegrn 12y ago
Nope, my post was just meant as some random fact. You can easily put a price on an infinite stream of constant payments. I don't believe the project is able to generate an infinite stream of 750$ payments. But if it could, that would be roughly it's value. By the way, for an investor it does not matter how much effort (1 year, 5 years, 100 years) the author did put into the project. For the present value of the project only matters what monthly payements there will be. If someone can forecast these payments, he can also put a price tag on the project. So it might also be, that there is no more interest in the game in one or two months ... then it would be roughly worth 0$ to 750$ (even if it took much effort to implement it).
- punee 12y ago
  You probably also want to revise your discount rate assumption.
  - alegrn 12y ago
    Sure. The given assumed discount rate of 3% was just meant as an example.
raphman 12y ago
Huh? You are questioning the commenter's sincerity just based on how often they want to post a comment on HN. Witch-hunting does not really make HN a better place.
PhasmaFelis 12y ago
Are you accusing the author of using a sockpuppet account to...give himself financial advice?

vacri 12y ago

The computer gaming market doesn't function like most other markets; the idea of considering that monthly income as recurring indefinitely is rather odd.

alegrn 12y ago
Of course, You are absolutely right. The author said he had no idea how to value his work and I was thinking... Hmm, he might try to use financial math formulas such as the NPV as help. If the game makes $9000 profit per year at a discount rate of 3% you could value it: $8738 ... (makes profit for N years, where N = 1) $17221 ... (makes profit for N years, where N = 2) $25458 ... (makes profit for N years, where N = 3) $41217 ... (makes profit for N years, where N = 5) $76772 ... (makes profit for N years, where N = 10) $133897 ... (makes profit for N years, where N = 20) $284390 ... (makes profit for N years, where N = 100) And no software is able to make profit for 100 years. (disclaimer: my calculation might of course be wrong, I didn't put much thinking into it)
stefan_kendall3 12y ago
There are few who can make this happen. If you're not minecraft or a subscription/in-app-purchase game, you're out of luck.