Proportionality. In applying ISAP 1 paragraph 1.5.8, and in particular paragraph 1.5.2., theactuary should take into account materiality. In addition, the degree of refinement in specificassumptions or methods recommended by the actuary should be proportionate to their possible impact on the results of the actuarial services.
Proportionality. (81) According to the Hungarian authorities, GKN Automotive compared the cases of the two locations — Hungary and Türkiye — in an NPV model, developed from December 2020 to January 2021. At the end of 2021, the model was updated based on: (i) the results of the work streams as described in recitals (70), (71), (73) and (74) and the incentive simulation of 3 November 2021, for the Turkish option, and (ii) the slightly higher cost for the purchase of the new plot of land and a refinement of assumptions concerning the building, building equipment and tooling (recital (70)) for Hungary. The NPV model compares Miskolc to the alternative location in Türkiye over the period 2021 — 2028, with sales starting in 2022, and considers a terminal value for both locations calculated on the basis of the modelled revenues for the last projected year adjusted by a growth rate of 1 %, net of costs (44). The model assumes inflation for labour costs with all other costs not being adjusted for inflation (45) as these costs are expected to be procured regionally in Europe regardless of the location of the Investment Project and therefore the same inflation assumption would apply in both locations. The beneficiary’s standard weighted average cost of capital (WACC) of [8 — 12]%, used for financial modelling and other investment decisions, was used for discounting purposes for both locations.