There is another function called FStepRevGrow (Time, Base, Finish, MktPrice, FirstRev, FromDates, AnnualRates, GrowthDates, GrowthRates, [RevMonthsOpt], [DayCount], [Periods], [ProjMode]). This function applies a fixed steppd annual rate profile to a market price that is growing according to GrowthRates. FStepRevGrow will use fixed rates up until the ultimate Finish.
This function, ?FStepRevThenGrow? (emphasis on the Then) takes this a step further, and is possibly a more rational approach. Just like FStepRevGrow, it uses your exact specified stepped rates for the first, fixed, section of the projection (it simply calls FStepRevGrow). Then, after the period of fixed steps is over, it grows the annual ratesd as well as the market price. This turns out to be useful in forecasting sales, where the first year or so you want to project quite specifically, but thereafter you are happy to let generic inflation rates govern the projection. |
FStepThenGrowRev.xls