[jacques_chester]

It's a pure summative estimate, as I understand it.

I imagine that it's taken as the input for a net present value calculation by many investors.

[Eridrus]

Two equal LTVs could results in pretty different NPV results depending on the expected lifetime, and using both averages for the discount definitely has some error.

[jacques_chester]

That's a good point. I'm reminded of von Neumann's quip that "with four parameters I can fit an elephant, and with five I can make him wiggle his trunk."