Category Archives: Time Horizon

Project Evaluation IV: Time Horizon

Project evaluation must select a time horizon.  Especially for projects front-loaded with significant capital investment, the longer the time horizon, the greater the prospect that the present value of project benefits exceeds the present value of project costs. This fourth post in the series on “Project Evaluation” argues that, rather than debating the choice of a fixed number for the time horizon, one should focus on the sources of project termination risk.  Continue reading