A project's duration should match the term of the financing that supports it. This is called the ____ principle.

Question

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The maturity matching principle states that a project's duration should match the term of the financing that supports it. This ensures that the cash flow generated by the project matches the cash flow needed to repay the financing. It helps to avoid potential cash flow problems that could occur if the project's duration is longer or shorter than the term of the financing.

A Project's Duration Should Match the Term of the Financing