Dear Paul,
That you for your reply and support.Yes you have understood perfectly, it is the wrong approach. I'll calculate each year in excel.
However even using my initial approach, P=1 in both graphs should have the same reported value since Year0 aftertax net equity cash flow value is the same for both solution modes.
Between PPA and IRR solution modes the only differences were PPA=0.38419 and PPA 0.38710 correspondingly. Therefore in my graphs, NPV for period=1 should have presented a slight difference but it didn't.
For example for 4% escalation rate and Period=1,Year1 revenue differences between the two solution modes are 1.1 mil.$ resulting in -669,000 $ for PPA solution mode and -66$ for IRR solution mode in afterTax equity column.
However the reported NPV is -217,576,000$ for the PPA solution mode and -85,082,500$ for the IRR solution mode.
Please note that 217,576,000 - 669,000= Year0 AfterTax Equity Cashflow.
However the same calc. formula for IRR solution mode does not result in Year0 AfterTax Equity Cashflow. I believe that there must be a calculation error here.
Both simulations used the same parametric analysis for analysis period=30, step=1 starting from 1 and PPA Escalation Rate= 0% to 4%,step 0.5%
What's the problem here? How come i am getting much different results?
Thank you in advance.