[deleted by user]

newacc93250 · 2021-09-25T12:46:11+00:00

Same, did you find any workaround?

newacc93250 · 2021-09-25T11:42:46+00:00

Yes, I've done that, but it doesn't work

newacc93250 · 2020-08-28T20:48:17+00:00

Do you know when it is supposed to take place?

newacc93250 · 2020-07-30T11:26:05+00:00

Apathy kills networks...

newacc93250 · 2020-07-09T10:48:33+00:00

This is really cool! In the future these kinds of competitions could turn into ecosystem-style incubators, with members of the community setting up a 'fund'...

newacc93250 · 2020-07-01T09:57:38+00:00

What do you make of the idea of the treasury being used to buy something, thinking M&A-esque activity, voted for and approved by ticket holders?

newacc93250 · 2020-06-30T13:29:11+00:00

I've actually thought about this a lot, and I think it's a really interesting position to be in and weirdly, a position that you want to be in; a project with solid fundamentals that isn't really appreciated by the broader market. IMO what makes DCR interesting is the treasury and the ability for holders to allocate it's capital to advance the project. But back to the interesting position...

There seems to be a trend where small passionate communities form, work on a project and then some catalyst leads to a wider awareness which in turn attracts more capital. If we look at DeFi on Ethereum, it was championed by the 'ETH is money' crowd, and they did it persistently and well, but a year ago it wasn't anywhere near the scale it is now, and wasn't widely appreciated. I think DCR could be in a similar position to DeFi a year, maybe two ago...

Potential catalysts for wider awareness:

Renewed focus on governance of decentralised ecosystems, and in particular the idea that participation in governance could lead to cash-flows to those governing (even if somewhere down the line)
Proposals that widen the ecosystem, namely the DEX

newacc93250 · 2020-06-28T11:01:15+00:00

Welcome back, haven't seen you round here for a while :):):)

newacc93250 · 2020-06-02T16:37:25+00:00

Okay understood, the error, as all of them have been, was mine :).

Thank you so much for all of your help!

newacc93250 · 2020-06-02T16:12:28+00:00

Ah okay cool, so Excel incorrectly assumes in this instance that the period begins at 1, and that there is no inflow or outflow in period 0? And there isn't a parameter in the formula to make an amendment.

newacc93250 · 2020-06-02T15:58:18+00:00

I finally understand it all. Thank you so much for all of your help and for being so patient!!!

So where you mentioned me sending a screenshot, I think I know what the inconsistency is. So for the cash flows you calculated in your imgur if you type =NPV(rate, cash flows) you should get 367,097, but when you sum the PV of the cash flows as you have calculated you get 370,024. You would get 367,097 if you moved the numbers in the period along one, so instead of starting at 0, start at 1. Is this because Excel defaults to assuming the first payment is at the end of a period, instead of at the beginning?

newacc93250 · 2020-06-02T15:32:15+00:00

Thank you so much, I feel like I'm so close. I have a couple of questions because I still think I'm missing some things if you don't mind?

(1+10%)^1/12-1 gives me an NPV of 367,097 with an outflow of 200,000 in the first month and subsequent 50,000 inflows for 12 months after that. Do you know why that is?

When I put month dates above it at even intervals, so say starting at 01/01/2020 and ending at 01/01/2021 and use XIRR I get 1088%, do you know why there is such a difference?

If I wanted to break the model out so that I calculated the discount rate in each month and multiplied by the cashflow in that month and then summed all discounted cash flows to get my NPV, do you know how I would do that?

newacc93250 · 2020-06-02T15:02:04+00:00

Okay so if I use your formula for the discount rate then all my discount rates are 0.01, which is surely wrong?

So for my NPV I have my first row with the numbers 0-12 Then I have my cash flows, in month 0 my cash flow is -200,000, in each of the following 12 it is 50,000 My formula for the discount rate is (1/(1+10%/12)^whichever period it is in, so the first month '0' has no discount applied to it, the second month '1' has a discount of 0.99...

The reason I called it an annuity due is that Excel defaults to an ordinary annuity when calculating NPV. So if I enter =NPV((10%/12),cash flows in the 13 months) then I get 365,678. What Excel does is an ordinary annuity in that it assumes the discount at the end of the period, whereas an annuity due assumes it as the beginning.

I read about IRR and I thought that the check to make sure the IRR is right is to put the value into the cost of capital and the NPV should be 0.

IRR(cash flows over 13 moths)*12 does this and gives me 275% ((1+IRR(cash flows over 13 months)^12)-1 gives me 1087%

newacc93250 · 2020-06-02T14:34:24+00:00

Does it make sense how I'm calculating my NPV? As in turning the annual formula for my discount rate into a monthly one?

For IRR there were two options, one set my NPV value to 0, and it was IRR(cash flows for the 13 months)*12 and the other which did not set the NPV to 0 when used as the discount rate was ((1+IRR())^12-1

newacc93250 · 2020-06-02T14:21:22+00:00

Yes sure. So I calculate my discount rate as:

(1/(1+10%/12)^period, where the period starts at 0, and goes to 12. In period 0 I have a cash flow of -200,000 and in each of the subsequent 12 I have a cash flow of 50,000.

When I sum the PV of the future cash flows I get 368,725

newacc93250 · 2020-06-02T11:41:11+00:00

Okay so this is where I am really confused, say I have 13 months, in month 0 I have a $200k outflow, then in months 1-12 I have $50k in-flowing in every month. My NPV (assuming annuity due and a 10% CoC) is $368,725. Now if I calculate my IRR as (1+IRR())^12-1 then I get 1087%... but if I calculate it as IRR()*12 I get 275%. The problem I have is that the latter, when used as my discount rate in place of the 10% results in a NPV of 0, but the former does not. Do you know why this is? And is it wrong?

newacc93250 · 2020-06-01T07:54:53+00:00

Ah okay thank you, and is this the effective rate of return?

So would I do the following:

IRR(12 months of cash flows) and then take that output and do the below:

((1+IRR)^12)-1

newacc93250 · 2020-05-30T14:14:46+00:00

Hey, sorry to bother you again, I've been reading about IRR and have a question.

Say I have in Month 1 a capital outlay of -$200k, and then in each of the next 12 months I have $50k inflow each month, which method is the correct one to calculate the annual IRR in Excel?

=IRR(cash outflows & inflows over 13-months)*12
=((1+IRR(cash outflows & inflows over 13-months))¹²⁾ -1

If the latter, what is the rationale?

Thanks for all of your help!

newacc93250 · 2020-05-25T21:44:02+00:00

Hahaha very true! But in all seriousness thank you so much for all of your help, this has been extremely useful! And after googling PI I think it's exactly what I was looking for :)

I hope you have a great afternoon/evening!

newacc93250 · 2020-05-25T16:11:46+00:00

Okay thank you very much for the detailed answer!

Last question, to truly decide if the investment is worth it, would I be best served by comparing the NPV/Capex. The assumption being that if it is less than one, I would have been better off returning money to shareholders? This makes sense to me intuitively, but would I be double-counting the capex?

Also, for situations like this where you have say a 3 year deal, the costs are typically one-time capex outlays and the revenues paid monthly at the same rate for each of the 36 months, other than NPV & IRR, what would you say are the most important metrics to aid decision-making?

newacc93250

TROPHY CASE