Specifying Expenses and Revenues for a Cash Flow Element

The key inputs to a Cash Flow element are the expenses and revenues that define the cash flow history. 

For example, if you were simulating a business venture that required an upfront startup cost of $1,000,000, operating costs of $10,000/month, and generated returns at a rate of $70,000/month, you would enter the startup cost and the operating cost as expenses, and the returns as revenues. 

The "Cash Flows" portion of the Cash Flow dialog is used to specify the Expenses and Revenues:

Expenses and revenues can be specified as continuous rates and/or as discrete changes.

The Expense Rate and Revenue Rate fields accept constants or links (with dimensions of currency per unit time).  These are treated as continuous rates.  Hence it would be most appropriate to use these fields only if you had expenses and/or revenues that could be approximated as being continuous (e.g., a daily operating cost). Expense Rate and Revenue Rate must be non-negative.

The Discrete Expenses and Discrete Revenues fields accept discrete change signals.  These fields are used to simulate transactions that must be treated in a discrete (as opposed to continuous) manner. The discrete change signals must have dimensions of currency and Add instructions. The discrete change signals can be positive or negative.  A negative Discrete Expense is treated as a Discrete Revenue, and a negative Discrete Revenue is treated as a Discrete Expense.

The buttons to the right of the Discrete Expenses and Discrete Revenues fields are used to enter multiple discrete changes.  These buttons provide access to the following dialog:

Note that you can also enter multiple discrete change signals into this field by separating them by semi-colons:

Note that when specifying cash flows into the future, it will often be appropriate to adjust the values for inflation.

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