If you have reliable economic forecast for five years only, and you would like to evaluate two alternatives with five and six years service lives, the best method to do so is
A)the repeated lives method.
B)the study period method.
C)Both repeated lives method and study period method produce the same result.
D)to choose the alternative with the highest FW.
E)to choose the alternative with the highest PW.

Question

Quizplus · Accepted Answer

The study period method is best when you have a reliable forecast for a specific period, as it evaluates alternatives over a common study period, which in this case is five years.

If You Have Reliable Economic Forecast for Five Years Only