From what I understand, PVO can also be seen as "Present Value of the portfolio".
If this is the case, doesn't the right-hand-side of the above equation should be multiply by .
For example, say we have only invested once (i.e all
CF_i are zero for i>0), then the above formula becomes
PVO=PVI=CF_0, which is clearly wrong (because investment value changes over time). So with what I suggests, it becomes PVO=PVI=CF_0*
Does this make sense? or am I doing something wrong?