Start learning →

Which method is often used to compare projects of unequal lifespans?

AEquivalent annual cost
BProfitability index alone
CSimple payback period
DAccounting rate of return
Answer & Solution
Correct answer: A. Equivalent annual cost
Annualising NPV, as in equivalent annual cost, makes projects of different lengths comparable.
Practise this question with Quill — CA Inter →

Keep practising Profitability Index

Browse all Profitability Index questions for CA Inter, or explore more Financial Management topics.

Start a Profitability Index lesson →
Related questions