This article from the Institute of Chartered Accountants of Nepal explains how to make sound investment decisions when projects have different lifespans. The author focuses on the Equivalent Annual Benefit (EAB) and Equivalent Annual Cost (EAC) methods, which translate uneven cash flows into comparable annual figures. These methods help companies choose projects with the highest annual benefits or lowest annual costs, making it easier to select the most cost-effective option, even when projects have varying durations. The article highlights the importance of considering these factors when making investment decisions and acknowledges the limitations of the EAB and EAC methods, such as ignoring inflation and technological changes.

Reference Document Link (PDF Page 37 to 43)