inflation rate

Dears:
I would like to ask, Is there a limit of the value of inflation rate in the input page?.
I have created a model of biomass power plant. but when I set inflation rate to 8% the model cannot detect the IRR.


Thanks in advance

Suzan

Dear Suzan,
In some cases there is not a solution to the IRR equation. In other words, there is no discount rate that results in an NPV of zero. That can happen, for example, when the PPA price is too low, and the annual revenue is insufficient to cover the initial cost. When evaluating the financial results of the model, you should always look at the financial metrics as a set. For a feasible project, the NPV should be positive, and the PPA price and IRR should be within a range acceptable to the project partners.
It could also happen if the system's annual output is not high enough to generate the revenue required to recover the intial cost of the project, or if the annual costs are too high compared to the revenue.
The interest rate affects the out-year annual costs in the cash flow. You can examine the cash flow table (click the Cash Flow tab on the Results page) to see what factors are contributing to the results you see, and then make adjustments to the inputs if there is a problem.
If you would like me to look at your file, please [url=mailto:sam.support@nrel.gov?subject=IRR%20and%20interest%20rate t=_self]email it to me[/url].
Best regards,

Paul.

Thank you so much, I have fixed it.