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Please, may I know if we are to use before tax WACC or after tax WACC while performing EAC calculations if given both in exams under normal condition.
I know that if the question says ignore tax, we use before tax WACC. THANKSYou use the after tax WACC in all investment appraisal questions (unless obviously told otherwise)
A Project that has the highest equivalent annual benefit should be chosen, even if it has lower NPV instead of Project which has the higher NPV but low EAC, so long as the project can be repeated for the foreseeable future.
does that mean if a project cannot be repeated for the foreseeable future, project with higher NPV should be chosen?
is that the assumption of EAB method that all project can be repeated for the foreseeable future? Thanks
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