Georgia Gaming Market Assessment - Pennsylvania Treasury

These were then input into a financial analysis which calculated the net present value (NPV) of
the project, the internal rate of return (IRR) and the payback period. These IRRs are the beforetax,
before-debt-service rates that investors and bankers will look for the project to achieve
before financing will be considered. As such this provides a useful practical real world criterion
to determine the minimum feasible size of a market that could realistically be developed in
today’s competitive environment
Valuation and Indicators
Large Medium
Medium/
Small Small Outlier
Total Revenues $299.6 $220.4 $150.7 $113.8 $73.8
EBITDA $66.0 $48.5 $29.4 $21.6 $13.3
Adjusted Net Present Value ($M) $105.4 $69.2 $4.3 ($23.1) ($51.8)
Internal Rate of Return 17.9% 17.4% 12.5% 9.1% 3.7%
Payback Period (in years)
Source: The Innovation Group
5.3 5.5 7.0 8.5 10 +
The Innovation Group Project #054-11 August 2011 Page 87