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Equivalent annual cost

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Which project has the lower Equivalent Annual Cost? Project A has a total life of 35 years comprising 5 years of set up time, and the remaining operating time. Set up cost is $70 annually, and operating cost is $10 annually. Project B has a total life of 30 years comprising 3 years of set up and the remaining as operating. Set up cost is $50 annually and operating cost is $20 annually. Assume r=10%.

Reference no: EM133475032

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