If you have reliable economic forecast for five years only, and you would like to evaluate two alternatives with five and six years service lives, the best method to do so is

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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If you have reliable economic forecast for
five years only, and you would like to
evaluate two alternatives with five and six
years service lives, the best method to do
so is
Select one:
a. to choose the alternative with the
highest AW.
b. to choose the alternative with the
highest PW.
c. Both repeated lives method and
study period method produce the
same result.
O d. to choose the alternative with the
highest PW, FW, or AW.
e. to choose the alternative with the
highest FW.
Transcribed Image Text:If you have reliable economic forecast for five years only, and you would like to evaluate two alternatives with five and six years service lives, the best method to do so is Select one: a. to choose the alternative with the highest AW. b. to choose the alternative with the highest PW. c. Both repeated lives method and study period method produce the same result. O d. to choose the alternative with the highest PW, FW, or AW. e. to choose the alternative with the highest FW.
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