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The challenger's cost figure used in the comparison is its

  • A.minimum equivalent uniform annual cost over its economic life
  • B.first cost divided by its expected life
  • C.annual cost in its first year of service
  • D.annual cost in its final year of service

Answer: A

Correct answer: minimum equivalent uniform annual cost over its economic life

The challenger is represented by the best it can do - its annual cost evaluated at its own economic service life, not at some arbitrary horizon. Using its first-year or final-year cost would compare the defender against a challenger operated inefficiently, which is not the alternative actually available.

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