If You Have Reliable Economic Forecast for Five Years Only

question 50

Multiple Choice

If you have reliable economic forecast for five years only, and you would like to evaluate two alternatives with five and six years service lives, the best method to do so is

• A)the repeated lives method.
• B)the study period method.
• C)Both repeated lives method and study period method produce the same result.
• D)to choose the alternative with the highest FW.
• E)to choose the alternative with the highest PW.

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Definitions:

Common Sense

Sound practical judgment concerning everyday matters, or a basic ability to perceive, understand, and judge in a manner that is shared by nearly all people.

Prediction

The act of making an educated guess about a future event or outcome based on current data or observations.

Gender-Balanced Group

A group composed of individuals in such a way that there is an equal or nearly equal number of members of different genders.

Theory

A system of ideas intended to explain something, based on general principles independent of the thing to be explained.