The Effect of Intertemporal Dependence in Cash Flows on Project Risk

  • April 4, 1991
  • • Written by: Christos P. Koulamas Stanley R. Stansell

Spring/Summer 1991, Vol 16, No 1

Abstract: A study examining the relationships between single project risk (and in particular the effect of intertemporal correlation in cash flows), present value, duration and optimal investment holding period shows that higher intertemporal correlation results in lower net cash flows, a shorter optimal holding period and shorter duration of net cash flow.