Question: There can be concerns with using EAC that need to be recognized. First, EAC assumes that each project can be repeated yearly with the same

There can be concerns with using EAC that need to be recognized. First, EAC assumes that each project can be repeated yearly with the same costs and conditions. This is often not the case, however, as labor and materials become more expensive, technology changes, or market conditions change. Additionally, EAC does not take into consideration qualitative issues such as risk of failure or downtime or environmental factors. EAC is also dependent on accurate life span estimates. If the actual life span is greater or less than estimated, it can significantly change the actual costs per year. Despite these limitations, EAC is a valuable tool to use to make capital decisions when combined with other strategic, qualitative and risk-based assessments

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