The steady-state population assumption is my biggest objection here. Everything you’ve written is correct yet I think that one premise is so unrealistic as to render this somewhat unhelpful as a model. (And as always, NPV of the eternal future varies a crazy amount even within a small range of reasonable discount rates, as your numbers show.)
The steady-state population assumption is my biggest objection here. Everything you’ve written is correct yet I think that one premise is so unrealistic as to render this somewhat unhelpful as a model. (And as always, NPV of the eternal future varies a crazy amount even within a small range of reasonable discount rates, as your numbers show.)
For what it’s worth, I don’t disagree with you, though I do think that the steady state is a lower bound of value, not an upper bound.