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)erosion cost
E)equivalent annual cost

Question

Quizplus · Accepted Answer

The equivalent annual cost is the annual annuity stream of payments that has the same present value as a project's costs. This metric is useful for comparing the costs of different projects with varying lifetimes or cash flow patterns. Choices A, B, C, and D do not represent the equivalent annual cost.

The Annual Annuity Stream of Payments That Has the Same