Introduction

 

 In this chapter, we add to our repertoire of alternative comparison tools. In Chapter 4 we learned the PW method. Here we learn the equivalent annual worth, or AW, method. AW analysis is commonly considered the more desirable of the two methods because the AW value is easy to calculate; the measure of worth—AW in monetary units per year—is understood by most individuals; and its assumptions are essentially identical to those of the PW method.