FOR EACH ONE TRUE OR FALSE? When you alternatives with different lives the easie

Question

FOR EACH ONE TRUE OR FALSE?

When you alternatives with different lives the easiest method to solve the problem is the present worth.

The equivalent annual worth method is called the equivalent annual cost when the cash flows are positive and negative in the investment project.

When the alternatives are of different time duration, and solved by the equivalent annual worth method you should have used the least common multiple method.

When alternatives are of different time duration, and you use the equivalent annual worth method, to have different lives does not matters.

Annual worth analysis is a popular method used in cost accounting.

In evaluating different investment alternatives the one with the highest positive return is the most acceptable.

The capital recovery annuity means the positive returns of the initial investment.

The sinking fund factor is an annuity for the payment of a future quantity.

In capitalized cost the time duration of the project is unknown.

The sinking fund factor is a lump sum.

Explanation / Answer

1. true

2. false

3. false

4. false

5. true

6. false

7. true

8. true

(it refers to the present worth of mainly cost or expenditures (cash outflows) of the alternative over infinite period of time. capitalized worth refers to present worth of expenditures and revenues of an alternative over infinite period of time)

9. false

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