The annualized net present value approach to evaluating projects with unequal lives converts the net present value of unequal-lived, mutually exclusive projects into an equivalent annual amount.

Question

Quizplus · Accepted Answer

This statement is true. The annualized net present value approach calculates the equivalent annual net cash inflow for each project based on its net present value and useful life, in order to compare projects with unequal lives on an annual basis. This makes it easier to compare and select the most profitable project among the options available.

The Annualized Net Present Value Approach to Evaluating Projects with Unequal