We are told that the project with highest EAA is the one that is preferred in chained unequal project life
in the answers it shows that the lowest EAA is actually the optimal one.
can anyone explain why?
dont have the problem out but Ill assume one is an EAA you pay (maintaining a fleet of cars) and the other is an EAA you receive (profitable investment).
it talks about the cost project so lesser the negative amount, appropriate to consider that project.
Yes. This is the Question with cards.
So we are not looking for the project that will bring most profit to share holders by choosing the one with highest EAA?
Isn’t it the exact method EAA that we use to find that in unequal life competing projects?
what is the rule of when to chose the highest EAA and when to chose the lowest EAA?