Petrocalc Corporation

Economics #4

4.  What type of discounting does MICA use?

Internally MICA discounts monthly cash flows using an annual discount rate and a non-integer number of years for the time factor.  The general form of the equation for the discount factor is:

DF = 1/(1+i)^(n/12)

Specific examples of the discounting method appear in the appendix of both the manual and online help file.

Further, since MICA uses a spread sheet for reporting purposes and since the user can program the spread sheet, you could set up any type of discounting you desire and save the discounting calculations in a report template.

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