Objective: To calculate the “True Love” cost of the 12 Days of Christmas
Reference Lyrics: “The Twelve Days of Christmas” (Traditional)
Alternatives Evaluated:
Alternative #1: Do Nothing (“Status Quo”)
Don’t sing this song - boring! And miss out on giving 364 presents to your “True Love”?
Alternative #2: Only sing verse 1 on the First Day Of Christmas
This would only cost $42.17 but would only yield 1 stupid Partridge - not much of a present for your “True Love”, eh?
Alternative #3: Just buy one of each item
Great idea - then she would have one of each at a cost of $19,054 (in Canadian dollars).
You might be able to pull this off, but what if your “True Love” found out that
she could have had it all? Let the arrows fly - all the goodness you’ve put into
Christmas will unravel and “Yule” have nothing to show! Guess you’ll have to go
for broke...
Alternative #4: Sing the whole friggin’ song!
Better prepare to re-mortgage your home, your parent’s home and your first born:
the cost of this alternative is a whopping $662,984
in Canadian Dollars!
... click here for
Cost Breakdown for 12 Days of Christmas
Key Assumptions & Uncertainties:
I’ve had to offset the high cost of the preferred Alternative #4 ($662,984) by
coming up with some very creative financial benefits… This way, corporate accounting will think this is in the same
league as the recent Canadian Gun Registration billion dollar boondoggle - “managed” by our
very own next Canadian Prime Minister Paul Martin! After all, if he can get away
with it, we should be able to sing our way through this!
Cost of Presents (Canadian $):
- Day 1: Partridge
in a pear tree... $42.17
- Day 2: Turtle Doves... $59.92
- Day 3: French Hens... $17.75
- Day 4: Calling Birds... $335.12
- Day 5: Golden Rings... $538.19
- Day 6: Geese a-laying... $179.77
- Day 7: Swans a-swimming... $8,364.66
- Day 8: Maids a-milking... $41.06
- Day 9: Ladies dancing... $3,114.84
- Day 10: Lords a-leaping... $3,600.87
- Day 11: Pipers Piping... $1,324.94
- Day 12: Drummers Drumming... $1,434.80
Total Individual Cost of above 12 Presents:
$19,054 (Alternative #3 above...)
How Financial Benefits are Derived:
Assumptions:
- 1.6% annual inflation as per Statistics Canada, October 2004;
- Discount rate of 8.0% (at least that’s what the corporate weenies told me to
use…);
- Exorbitant Canadian taxes included (and cleverly hidden) in the base cost
estimates;
- many fudge factors considered… few used… best excuse benefit comes from Avoided Lost
Relationship valued at $30k per year for next 20 years...
Based on Generally Accepted Accounting Principles (GAAP) and Cooks
Constant, the Financial Benefits are derived as
follows:
- NPV of $785k at useful life of my “True Love” (set at 20 years unless she gets
too old too quick… then we’ll rejig recalculate the numbers);
- Benefit/Cost (B/C) of 2.1
This project is a definite winner - shareholders will jump at the opportunity to
invest $662,984 to sing “The Twelve Days of
Christmas”!
Ability to Realize Benefits:
This song will have a major impact for the rest of your life!
Recommendation:
Alternative #4 is recommended - go for broke and sing the whole song! Your “True
Love” is well worth spending $662,984 on!
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