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The payback calculation doesn't consider time value of money. They are paying down £40K today but the savings are realized over years in the future. But they im
by malshe 9mo ago
The payback calculation doesn't consider time value of money. They are paying down £40K today but the savings are realized over years in the future. But they implicitly assumed the discount rate on those savings to be 0.
- antisthenes 9mo agoYes, if you want to be super precise you have to factor in both the time value of money on one hand and inflation & energy bill increases on the other. But very often these will roughly cancel each other out.