Hello guys! I have a bit of a problem, I am working in a model that includes Gross Cash Flows (in the model defined as Variables, V_GrossCashFlow), which can be positive or negative of course. If the Gross Cash Flows are positive, then a Tax Rate should be applied to them, resulting in Net Cash Flows (V_NetCashFlow). If the Gross Cash Flows are negative, then Net Cash Flow will just be equal to the Gross Cash Flow. For the V_Net Cash Flow variable I am using a definition such as the following:
if (V_GrossCashFlow(tr) > 0 [€]) then
V_GrossCashFlow(tr) * (1 - P_TaxationRate)
The obvious problem with this is that the model goes from being LP to NLP. I was wondering if you guys had any idea to model this situation without introducing Non-Linearity. I have tried using binary variables a bit, but every solution I can find with them forces me to define the binary variable using V_GrossCashFlow anyway, so the model is still Non-Linear.
I would be very thankful if anyone had any possible way to go about it.
Many thanks in advance!
Best answer by Marcel HuntingView original