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When comparing different-life alternatives by the annual worth method, the annual worth calculated using their LCM...

When comparing different-life alternatives by the annual worth method, the annual worth calculated using their LCM of lives will be the same as that calculated over one ______________. When comparing different-life alternatives by the annual worth method, the annual worth calculated using their LCM of lives will be the same as that calculated over one ______________. Open choices for matching When comparing different-life alternatives by the annual worth method, using the AW calculated over each one's life cycle assumes that the assets will be needed for _______________. When comparing different-life alternatives by the annual worth method, using the AW calculated over each one's life cycle assumes that the assets will be needed for _______________. Open choices for matching When comparing different-life alternatives by the annual worth method, using the AW calculated over each one's life cycle assumes that the cash flows in succeeding life cycles will change by exactly the _____________.

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Answer #1

1. When comparing different-life alternatives by the annual worth method, the annual worth calculated using their LCM of lives will be the same as that calculated over one Life Cycle only.

2. When comparing different-life alternatives by the annual worth method, using the AW calculated over each one's life cycle assumes that the assets will be needed for their least common multiple of years.

3. When comparing different-life alternatives by the annual worth method, using the AW calculated over each one's life cycle assumes that the cash flows in succeeding life cycles will change by exactly the inflation or deflation rate.

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