Which of the following can be used to make a comparison of projects with unequal lives?

Question

Quizplus · Accepted Answer

The Replacement Chain Method and Equivalent Annual Annuity Approach can both be used to make a comparison of projects with unequal lives. The Replacement Chain Method involves replacing a project at the end of its useful life with a similar project, whereas the Equivalent Annual Annuity Approach calculates the equivalent annual cash inflow of projects with different lives. By using both of these methods, projects with unequal lives can be compared on the same basis. Profitability Index may be used as a ranking tool to evaluate projects, but it does not adjust for unequal lives directly.

Which of the Following Can Be Used to Make a Comparison