Loading...

3.11. EAC – an example

Course video 31 of 59

We start Week 3 of the Course by the discussion of criteria of choosing investment projects. Beside NPV, the internal rate of return (IRR) and other approaches are introduced. We show why the NPV criterion is the best and why the application of others may lead to wrong investment decisions. Then we focus on the main ideas to be taken into account while setting up cash flow patterns and making the choice of project on the basis of NPV. We mention some special issues – relevant costs, depreciation, inflation. We present the concept of equivalent annual cost (EAC) as a method of comparing projects of different length. Then we study the application of EAC in greater detail in a case.

关于 Coursera

课程、专项课程和在线学位均由全世界一流大学和教育机构的顶尖授课教师教授。

Community
Join a community of 40 million learners from around the world
Certificate
Earn a skill-based course certificate to apply your knowledge
Career
Gain confidence in your skills and further your career