Question

MARR = 5%, and we have project A, project B, project C. EUAW of A =...

MARR = 5%, and we have project A, project B, project C.

EUAW of A = 700, EUAW of B = 800, EUAW of C = 500.

Their lifetimes: 2 years for A, 5 years for B, 8 years for C.

Consider that they are one-time project(that is, they will not be repeated), which one is the best choice?

Homework Answers

Answer #1

EUAW - Equivalent Uniform Annual Worth

When the EUAW of a system or project is a positive number, it indicates that the project is economically viable or profitable and can be chosen. The main advantage of this method is that EUAW is calculated by taking into consideration of unequal lives or the unequal initial investment of all the projects which are compared.

Hence, we need not to worry about initial investment or lifetime of prjects while comparing EUAW of projects.

Therefore, the best choice is project B which has the highest EUAW

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