Question: Darius owns a bakery and must replace his current oven. In order to compare alternatives, Darius has calculated the NPV of each replacement oven and

Darius owns a bakery and must replace his current oven. In order to compare alternatives, Darius has calculated the NPV of each replacement oven and converted that value to an annuity. We refer to this annuity as:

yearly incremental costs
sunk costs
opportunity costs
erosion cost
equivalent annual cost

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