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Project Duration

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Project Duration

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  • October 15, 2016 at 1:00 pm #343339
    felixb1
    Member
    • Topics: 1
    • Replies: 0
    • ☆

    a quick one here. Ive seen project duration calculated as a percentage of the NPV for each inflow and also just simply multiplying it by the year it relates too (ignoring percentage)
    both have different answers I believe which is correct.

    (the question it uses different techniques is Jonas chemials and CD for your ref)

    thanks

    October 15, 2016 at 5:11 pm #343361
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54702
    • ☆☆☆☆☆

    But either approach gives the same answer.

    Multiplying by the PV’s and then dividing by the total PV, is the same as multiplying by the PV as a % of the total PV.

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