Question 1 (5 points) Annual Worth (AW) calculations require equal life alternat

Question

Question 1 (5 points)
Annual Worth (AW) calculations require equal life alternatives.
True

False
Question 2 (5 points)

Annual worth consists of: capital recovery minus annual operating cost.
True

False
Question 3 (5 points)

AW equivalent of a long term project (indefinite, very long, or infinite life) requires software
due the high number of calculations that need to be performed to simulate an infinite number of
years.
True

False
Question 4 (5 points)

Annual Worth (AW) may also be called:

1-Equivalent Annual Cost (EAC) Annual Equivalent (AE)
2-Equivalent Uniform Annual Cost (EUAC)

3-All of the above
4-None of the above

Question 5 (5 points)
In an annual worth calculation, the capital recovery portion cosists of all the following EXCEPT:

1-Initial investment
2-Salvage value

3-Annual operating cost

4-Non-recurring costs

Explanation / Answer

Annual Worth (AW) calculations require equal life alternatives

False

Annual worth consists of: capital recovery minus annual operating cost.

False

AW =

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