Adjusting Cash Flow Expenses and Revenues for Inflation

When specifying cash flows into the future, it will often be appropriate to adjust the values for inflation. This can be done in a straightforward way by using GoldSim's built-in financial compounding functions.

In particular, the "ptof" function converts a present value to a future value given a rate per period and the number of periods. For example, if the current cost for a particular service was 1000 $/yr, and you assumed an inflation rate of 3%/yr, then the inflated cost at any time in the future could be computed as:

1000 $/yr * ptof(3%, ETime|yr|)

The output of this expression is the inflated cost of 1000 $/yr at Etime years into the future.

This would be entered into the Cash flow element as follows:

If you wanted to apply inflation to a discrete expense or revenue, you would need to use the "ptof" function in the Value field of the Discrete Change.