What Happens to the Equivalent Annual Cost of a Project

question 22

Multiple Choice

What happens to the equivalent annual cost of a project as the opportunity cost of capital decreases?

• A)it increases.
• B)it decreases.
• C)it is not affected.
• D)it depends on whether or not the projects are mutually exclusive.

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Definitions:

Written Notice

A formal, documented communication required in many legal situations to officially inform a party of certain actions or intentions.

Oral Notice

Notification or communication of information conveyed through spoken words rather than written form.

Commercial Illegality

The state of being contrary to the laws governing commerce and business practices.

Commercial Impracticability

A doctrine in contracts law where a party may be relieved from performing under a contract, due to unforeseen and impractical hardships, not within the contemplation of the parties at the time of the contract’s formation.