NPV vs. EAA analysis
I am trying to understand why (if a project is expected to be continued forever) we cannot use the NPV method (must instead use the EAA method or the least common multiple of lives method).
With the NPV method, couldn’t you simply calculate the PV on the perpetuity of the indefinite amount of operating cash flows?
This tells me you could simply employ the NPV comparison method between projects rather than the EAA or the least common multiple of lives method.
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