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Do-nothing should be included as an alternative whenever

  • A.the discount rate is uncertain
  • B.the alternatives differ in first cost
  • C.the investment is genuinely optional
  • D.the alternatives have unequal lives

Answer: C

If no action is a real possibility, it is the baseline against which the others must justify themselves. Where a service must be provided somehow, do-nothing is infeasible and the comparison is between the active alternatives only.

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