|Constant Rate Revenue family|
|Make projections at a constant rate and multiply the result by the prevailing market price, calculated off a forecast|
|Introduction: The Constant Rate Revenue Family is about applying the Constant Rate family of functions in the most common scenario - projecting revenue.|
Usually you would do this by separately projecting the price and the production, and multiplying the two together. This can in some circumstances be rather less than perfect, because the price might change midway through a timeperiod and there is some confusion as to whether you use the average, starting or closing price. If your rate changes and price changes are not coincident, it tends to mean that when you run your model on different timebases eg quarterly and annually, you get slightly different answers, and you don"t know which is the correct one.
The functions in the Constant Rate Revenue family take care of when price movements occur and even offer you the option, through the RevMonthsOpt variable, of specifying the frequency at which you want the price movements from the forecast to be applied to the revenue stream, for example, you might want the price only to be allowed to change annually. The default is that price changes are applied continually ie as soon as they happen on the forecast.
|Functions in the Constant Rate Revenue family (4)|