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Equivalent Annual Cost – EAC Definition


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Quotes of the day:

Doctors pour drugs of which they know little, to cure diseases of which they know less, into patients of whom they know nothing.

— Moliere

Equivalent annual cost (EAC) is the annual cost of owning, operating, and maintaining an asset over its entire life. EAC is often used by firms for capital budgeting decisions, as it allows a company to compare the cost-effectiveness of various assets that have unequal lifespans.

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