The base time period over which monthly benefits from an investment proposal are counted and valued against the original cost of the investment. Used specifically for IRR, NPV, and VAE calculations they are a critical input to the process and in the ultimate determination of the viability of the project.
I make a proposal to you. 'Give me $10 today and I will give you $2 per month' How does that sound? Of course it is incomplete because you don't know for how many months you are going to get the $2! It's the same with investment proposals. Monthly benefits are claimed that will accrue from customer investment. If you don't agree over how many months, then the calculations cannot be completed. Review periods for such appraisals are normally between 6 months and 5 years.
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