Mutually exclusive alternatives
implies other will be excluded.
al alternatives will fulﬁll the same need,so the selection of one alternatives
Service Project - doesn't affect ﬁrms revenue,so it just affects the costs.
- choose project with the lowest cost.
Revenue Project - Revenues depend on the choice of the alternative.
- choose the project with the highest PW/FW/AE ( assuming they are positive )
Analysis Period - time span over which economic effects are to be evaluated.
a) must make a fair comparison between projects.
b) equal lives gives straight comparison of PW/FW/AE
c) project lives shorter than analysis period (