Project duration
You'll learn how project duration overcomes the limitations of payback period by measuring how long it takes to recover the majority of a project's present value, considering all cash flows and their timing.
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In this lesson
- 0:00 Project duration overview
- 0:55 Calculating Macaulay duration step by step
- 2:04 Modified duration and price sensitivity
- 2:48 Worked example: Ineos investment analysis
About this lesson
This video covers the two main types of duration—Macaulay duration and modified duration—and walks you through the calculation methodology step by step. Understanding duration helps you compare projects fairly and assess risk, making it an essential technique for investment appraisal in FM, AFM, and SBL. You'll see a worked example showing how to calculate Macaulay duration in practice, so you can apply this method confidently in your exams and real-world scenarios.
Duration: 4m
Transcript
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