The equivalent annual cost considers which of the following?
I.required rate of return
II.operating costs
III.need for replacement
IV.economic life
A)I and II only
B)II and IV only
C)II, III, and IV only
D)I, II, and IV only
E)I, II, III, and IV

Question

Quizplus · Accepted Answer

The equivalent annual cost (EAC) method considers all listed factors: the required rate of return, operating costs, the need for replacement, and the economic life of an asset. This approach helps in comparing the cost-effectiveness of different assets over their lifespans by converting their costs into an annualized figure.

The Equivalent Annual Cost Considers Which of the Following