Closed rjhanes closed 4 years ago
I don't think we should be comparing the value threshold to the NPV. The value threshold equation is itself a risk-adjusted NPV equation. It might make more sense to just calculate the risk-adjusted NPV in one way and use that as the criteria.
resolved?
completing stages
multiplying both sides of the inequality?value threshold
contains the future revenues discounted to present, butidealized internal NPV
contains both the costs and the revenues discounted to the present, but discounted using the PV formula instead of the CRF formula. I think we need to delete the revenues from the right-hand side of the equation so that we are comparing probability-adjusted revenue on the left to the expected costs on the right, but using the same discounting formula on both sides.