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Question 18 1 pts Which of the following statements is true regarding the equivalent annual cost, EAC, as used in capital bud
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Answer #1

The following is true of EAC:-

a) Calculating the EAC is useful when you are comparing projects with different life spans

The equivalent annual cost is the total present value divided by the sum of present value factors. Thus this gives a comparable measure to compare both the projects with unequal life's

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