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The net present value is the present value of the after-tax cash flow discounted to year one using the nominal discount rate, plus the after-tax cash flow in year zero:
Where,
NPV ($)
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The net present value of the project over its life.
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N
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The number of years in the project life, defined by the analysis period on the Financing page.
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Rn ($)
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The required revenue in year n, shown in the Revenues row of the cash flow table, equal to the product of the electric output and electricity sales price in year n. Note that the electricity sales price in year 1 is equal to the first year PPA price, and in subsequent years (R1<n≤N) is equal to the first year PPA price adjusted by the PPA escalation rate defined on the Financing page.
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CAfterTax,n ($)
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The after tax cash flow in year n, equal to State Tax Savings + Federal Tax Savings + PBI Incentives - Operating Costs - Debt Total Payment + Revenues in the project cash flow.
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dnominal
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The nominal discount rate, calculated as shown below.
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The nominal discount rate can be calculated based on the values of the real discount rate and the inflation rate on the Financing page:
dnominal = (1 + dreal)(1 + e) - 1
Where,
dnominal
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Nominal discount rate expressed as a fraction.
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dreal
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Real discount rate defined on the Financing page expressed as a fraction.
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e
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Inflation rate defined on the Financing page expressed as a fraction.
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