So i have this document which outlines a way of finding the LRMC (Long Run Marginal Cost) of an asset using the "Average Incremental Method" to calcualte the LRMC for electricity assets.
The formula is here: http://imgur.com/a/2DpAO
Assume that i had all those values (I do), how do you calculate it? Do i just divide by the discount rate n times for n years? (e.g x/(1+r/100)^n
It's not like other NPV calculations where you have a fixed cost and then repayments.
Dumb question but i'm confused. Thanks!
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