When unequal-lived projects are independent, the length of the project lives is not critical.

Question

Quizplus · Accepted Answer

When projects are independent, the cash flows from one project do not affect the cash flows from another project. Thus, the length of project lives is not critical. It is only important in a mutually exclusive project scenario where projects are compared based on their equivalent annual annuities (EAAs) or their net present values (NPVs).

When Unequal-Lived Projects Are Independent, the Length of the Project