Guy,Your NPV calculate might or might not be right. What I was...

Guy,
Your NPV calculate might or might not be right. What I was commenting was the statement that a $2B NPV would "only get the present value of your money back".

In fact, an NPV of zero achieves that. An NPV of zero gives you exactly the Internal Rate of Return as the discount rate used in the NPV. That rate is not the return you want, but the estimate of the cost of capital (itself incorporating inflation) which is why most companies aim for an IRR of over about 15% or more (some have a hurdle rate as high as 30% - but be wary, this is not the rate you use as a discount rate in the NPV calculation, the two are only the same in the special case where NPV = zero).

Both ROY and CAP have major hurdles. I suspect the least of these is the NPV or the IRR. Rather, it's getting the financing to build their respective projects. If ROY can get their CAPEX requirement to under $1.5B, they will be in a superior position over CAP with their +$3B CAPEX needs.