A formula used in comparing projects with the same net present value but different terms. It is computed asC= r(NPV) / 1 - (1+r)-nwhere, NPV is the net present value, r is the rate per period and n is the number of periods.
Related information about equivalent annual annuity:
- Equivalent Annual Annuity
The equivalent annual annuity formula is used in capital budgeting to show the net present value of an investment as a series of equal cash flows for the length ...
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The equivalent annual annuity (EAA) approach calculates the constant annual cash flow generated by a project over its lifespan if it was an annuity.
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In finance the equivalent annual cost (EAC) is the cost per year of owning and operating an asset over its entire lifespan. EAC is often used as a decision making ...
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The amount per year for some number of years that has a present value equal to a given amount. Equivalent Annual Annuity. The amount one would receive ...
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Definition of equivalent annual annuity: A formula used in comparing projects with the same net present value but different terms. It is computed asC= r(NPV) / 1 ...
- What Is an Equivalent Annual Annuity?
Nov 13, 2012 ... An equivalent annual annuity is a calculation that's used to evaluate investment projects that mature at different times. The way...
- Equivalent Annuity Method | Economy Watch
Equivalent annuity method is also known as equivalent annual cash flow or equivalent annual annuity.The equivalent annuity method is employed to compare ...
- Capital Budgeting Basics, PowerPoint
... of Return (MIRR); Profitability Index (PI); Equivalent Annual Annuity (EAA); Replacement Chain. 8. 9. What is capital budgeting? Analysis of potential projects.