The annualized net present value approach used to evaluate projects with unequal lives converts the net present value of unequal-lived, mutually exclusive projects into an equivalent annual amount.

Question

Quizplus · Accepted Answer

The statement is true. The annualized net present value approach is a method used to compare projects with unequal lives by converting their net present values into an equivalent annual amount. This allows for a more accurate comparison between projects that have different timelines and can help with decision-making on which project to pursue.

The Annualized Net Present Value Approach Used to Evaluate Projects