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Annual worth and present worth analysis will

  • A.give the same decision only for equal lives
  • B.always give the same accept-or-reject decision
  • C.sometimes give opposite decisions
  • D.give the same decision only at zero interest

Answer: B

Correct answer: always give the same accept-or-reject decision

\( AW = PW \times (A/P, i, n) \), and the capital recovery factor is always positive, so multiplying by it cannot change a sign. A positive present worth therefore means a positive annual worth and the same decision. The two are the same measure expressed at different points in time.

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