“…He began with an estimate of the net cash-flow (misleadingly referred to as "profit", but explicitly excluding all non-cash deductions such as depreciation) for each pit, based on stated assumptions of the possible annual output, prices and costs and the duration of the leases held by the business. These estimated total annual "profits" were then valued as annuities, of the same duration as the leases held, at discount rates of 12 per cent and 14 per cent, a high discount rate -but in line with the returns expected from mines at that time (see, for example, Taylor, 1980, p.59;Church, Baldwin &Berry, 1994, p.716 andBoyns &Edwards, 1995, p.31). The techniques employed in the valuation indicate his clear understanding of discounting and net present value as a basis for financial decisions as early as 1863 -a point already noted by Baldwin, 1994, p.4, and further discussed below.…”