Comment by s1artibartfast

NPV of deferred payment being less than the equivalent payment is not sufficient to demonstrate savings. 1) you must know the market clearing rate of the up front payment. 2) This sidesteps the difference in payer.

$100 today and $100 is cheaper than $200 today, but not if the alternative is $101 today. Similarly, you might not agree is a good deal if I offer $100 today instead of $200 and leave you the $100 debt. Beneficiaries are not the same as the debt holders.

Lastly, deferred payment is a good deal if I invest the present savings. If I dont, the NPV calculation benefit calculation isn't applicable.