Two types of batteries are being considered for use in electric golf carts. Burnout brand has a three year life, while Long-lasting brand has a ﬁve year life. You must choose between the two batteries
And you expect to replace the brand you ultimately choose continuously. You should:

Question

Quizplus · Accepted Answer

When choosing between two options with different lifetimes or useful lives, the best metric to use is the equivalent annual cost (EAC) because it factors in both the initial cost and the cost of replacement. Therefore, the option with the smaller EAC is better because it takes into account the longer useful life of the Long-lasting brand battery, which will require fewer replacements and therefore have a lower overall cost per year. Therefore, the best choice is to take the Long-lasting brand battery, which has a longer useful life and a smaller EAC.

Two Types of Batteries Are Being Considered for Use in Electric