It's a choice criterion when comparing investments with different time horizons. It is the Net Present Value - NPV averaged over the life of the investment from time t=1 to T using the formula:

Where i is the investment discount rate and T is the length of the time horizon. The investment with higher equivalent annual annuity will be preferred.

Editor: Giuliano DI TOMMASO

  • Privacy Policy
  • Cookie Policy
  • Publication Ethics and Malpractice

Copyright © 2019 ASSONEBB. All Rights reserved.