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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Project Duration
Hello Sir,
Just a quick question in relation to project duration.
Would I be right in saying that similarly to Macaulay Duration, would dividing the project duration by the WACC used to calculate NPV give a modified duration for a project i.e. an indication of how sensitive the NPV of a project is to increases in rises in cost of debt or shareholders required rate of return? and in turn could this be used to calculate IRR?
Thanking you,
John
Yes – you would be correct 🙂
Thanking you
You are welcome 🙂