What Is the Equivalent Annual Cost (EAC)

question 36

Multiple Choice

What is the equivalent annual cost (EAC) ?

• A)annual cost of the initial investment in an asset spread over its economic life
• B)average annual cost of owning and operating an asset over its economic life
• C)the market cost of replacing the service provided by an asset
• D)the sum of the asset's depreciation and its operating costs in any given year
• E)the difference between the profits generated by an asset and the cost of operating it

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Definitions:

Absolute Value

The distance of a number from zero on the number line, without considering direction.

Inequality

A mathematical expression that shows the relationship between two values that are not equal, using symbols such as <, >, ≤, and ≥.

Compound Inequality

A mathematical expression that combines two inequalities, often joined by "and" or "or," to compare values.

Solution Set

The complete set of all possible solutions that satisfy a given equation or system of equations.