Comparing Alternatives - Study analyses period
4 important questions on Comparing Alternatives - Study analyses period
What is the study period/planning horizon?
What are [2] situations in comparison of useful lives of alternatives?
- Useful lives are the same for all the alternatives and equal to the study period.
- Useful lives are different among the alternatives and at least one does not match the study period.
In unequal lives among alternatives explain the repeatability assumption [2]
- Study period over which the alternatives are being compared is either indefinitely long or equal to a common multiple of the lives alternatives;
- The economic consequences to happen in an alternative initial useful life span will also happen in all replacements;
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When the repeatability assumption is not met what assumption is used?
Uses a finite and identical study period for all alternatives.
Repeatability assumption is almost never met in real-life.
The question on the page originate from the summary of the following study material:
- A unique study and practice tool
- Never study anything twice again
- Get the grades you hope for
- 100% sure, 100% understanding
