Discussion
Consider the following statements about worth analysis.
1. Annual worth avoids the need for a common study period 2. Present and annual worth can give opposite decisions 3. Sunk costs are irrelevant to a current decision
Answer: D
Correct answer: 1 and 3 only are correct
Statements 1 and 3 are correct: annual worth is already per period, and sunk costs cannot bear on a present decision. Statement 2 is false, since \( AW = PW \times (A/P, i, n) \) and the factor is always positive - the two measures cannot disagree about a sign.
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