Annex White book.pdf

A5.1.2 FEASIBILITY STUDYDynamic inversion analysisFollowing, we demonstrate the most characteristic parameters ofthe above mentioned indicators. These indicators refer to the cash flowof cultivation during its utilized period. Following concepts are used asdynamic selection methods:• Internal profitability percentage (IPP)• Current net value (CNV)• Recovery time• Current value percentage or profit / return percentageThe current net value is calculated according to following formula:VAN= VA− A = −A+nii= 1 1+∑Qi( k)Where:• VAN : actual net value• VA: actual cash flow value• A: return value• Qi: year i cash flow• k: capitalization percentageFurther on, we calculate the value k, which nullifies the CNV andgives the IPP percentage, defining the recovery time (return payment retrievalperiod).In table 5 we can see the indexes resulting from the dynamic inversionanalysis.192