Topic: NPV Net Present ValueSubscribe | Previous | Next
Tri Ilham Wicaksono 3/5/2017
Greetings,
From LEAP's training exercises page 53 Section 4.4 Cost-Benefit Results, we knew the Net Present Value (NPV) of our model. However, in my model, the NPV result encounters error as depicted in attachment. I've click the Results section, and the Result is succeeded without any error.
Thank you for anyone who will answer my question or give any insight about this problem.
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Taylor Binnington 3/6/2017
Tri Ilham,
The cost-benefit summary is showing the scenario "Optimization" in its columns, compared to the scenario "Optimization" (set in the mnu above the chart). LEAP compares scenarios through subtraction, which means the values in the column are calculated by subtracting Optimization from itself. The result is necessary zero in all rows.
Taylor
Tri Ilham Wicaksono 3/7/2017
Thank you for replying my question.
So in case we want to know the NPV result, we have to make at least 2 different scenarios, and compared through Summary Tab?
And is there any method to know NPV result without accessing Summary tab?
Thank you
Thank you
Taylor Binnington 3/12/2017
That's right - the net present value is a comparative number, so it requires that costs and benefits be expressed relative to another scenario.
You can use the Results view to show the NPV by showing Costs: Social Costs, and show Cumulative Values, then select Discounted Costs, and choose to show Differences vs. (your reference scenario of choice). Also be sure that you have selected the top branch in the tree with your mouse, to display all costs wherever they arise in your model. All of these options can be configured above the chart by selecting "More".
The (cumulative) result shown for the end year of your analysis will give you the NPV, or in other words, the cumulative discounted cost relative to another scenario.
Best,
Taylor