NPV for multiple investments

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rubynguyen
Junior Member
Posts: 11
Joined: Mon Apr 18, 2016 4:33 pm
Vensim version: DSS

NPV for multiple investments

Post by rubynguyen »

Hello,

I'm trying to calculate the NPV so that when NPV is >=0, a new investment starts.
I'm attaching a small version of a bigger model. I encountered 2 problems:
1. The NPV function of the attached model keeps complaining that it needs an operator, but I'm not sure what's missing
2. In the bigger model where the NPV function does work, the problem is when the next investment takes place, the investment for each module, initially set at 3.8 M, will also be discounted at the IRR so it'll be much more expensive. As a result, the next investment will never pay back. It seems that I should calculate a separate NPV or reset the NPV calculation. So far, I've been unsuccessful in doing so. How do I tackle this?

Any input is highly appreciated. Thank you!
Attachments
npv.mdl
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tomfid
Administrator
Posts: 3252
Joined: Wed May 24, 2006 4:54 am

Re: NPV for multiple investments

Post by tomfid »

Not sure how it happened, but somehow your calculated NPV equation has a null type. Set it to "auxiliary" and it will work.
rubynguyen
Junior Member
Posts: 11
Joined: Mon Apr 18, 2016 4:33 pm
Vensim version: DSS

Re: NPV for multiple investments

Post by rubynguyen »

Thank you, Tom!
As for the multiple NPV calculation, I guess I have to create an NPV stock and discount the cashflow manually, instead of using the NPV function. That way I can reset the NPV calculation.
tomfid
Administrator
Posts: 3252
Joined: Wed May 24, 2006 4:54 am

Re: NPV for multiple investments

Post by tomfid »

Yes, that would make sense.
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