NPVE(stream,discount rate,init val,factor) Net Present Value with End of period valuation
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Returns the net present value of stream computed using discount rate. The computation done assumes that the stream is valued at the end of the period and that the discount rate is intended as a discrete period rate. This is the same set of assumptions that Excel uses and can be helpful if you are trying to get some basis for comparison. Equivalent to the equations:
MYNPVE = ( NPV ACCUM + stream * TIME STEP * df ) * factor
NPV ACCUM = INTEG ( stream * df , init val)
df = INTEG ( -df * discount rate / ( 1 + discount rate * TIME STEP ) , 1 / ( 1 + discount rate * TIME STEP ) )
Units: NPVE(units,1/time,units*time,dimensionless) --> units*time
NPVE(cash flow,discount rate,0,1)
returns the net present value relative to the initial time for the cash flow to Time.
|NPVE(cash flow,discount rate,0,(1+discount rate*TIME STEP)^|
|((Time-INITIAL TIME)/TIME STEP))|
returns the net present value at Time for the cash flow to Time.
The difference between NPV and NPVE is quite small. For models that do not have TIME STEP>=1 it is best to stick with NPV.