The annual annuity stream of payments that has the same present value as a project's costs is referred to as which one of the following?
A) Yearly incremental costs
B) Sunk costs
C) Opportunity costs
D) Annuitized erosion cost
E) Equivalent annual cost

Question

Quizplus · Accepted Answer

The annual annuity stream of payments that has the same present value as a project's costs is referred to as equivalent annual cost. This is a useful tool for comparing the cost-effectiveness of different projects with different initial costs and life span. Choice A, B, C, and D are not relevant to this concept.

The Annual Annuity Stream of Payments That Has the Same