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Good afternoon,
Please can you help me understand the purpose/meaning of project duration?
I.e. why is it useful?
Thanks,
DanGiven that future cash flows are uncertain, whichever appraisal method we use, then the shorter the project duration the affected we are by the uncertainty i.e. the less risk there is of doing the project.
It is the same idea as the payback period, but takes into account the cost of capital.
Have you watched my free lectures on this?
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