Which of the following does NOT require finding the point where NPV = 0?
A) Calculating IRR.
B) Setting a bid price.
C) Determining the point where a firm is indifferent between accepting or rejecting a project.
D) Finding the financial break-even point.
E) Finding the EAC.

Question

Quizplus · Accepted Answer

Finding the Equivalent Annual Cost (EAC) does not require finding the point where NPV = 0. EAC is used to evaluate the annual cost of owning and operating an asset over its entire lifespan. It's a method for comparing the cost-effectiveness of different projects with different lifespans, not for determining the IRR or the financial break-even point.

Which of the Following Does NOT Require Finding the Point