What implicit assumption is made when managers use the equivalent annual benefit method to decide between two projects with different lives that use the same resource?

Which of the following statements is correct?(Select the best choice below.)

A.

The equivalent annual cost method implicitly assumes that, at the end of the life of the shorter length project, you can replace the shorter length project at its original terms.

B.

The equivalent annual cost method implicitly assumes that, at the end of the life of the shorter length project, you cannot replace the shorter length project at its original terms.

C.

The equivalent annual cost method implicitly assumes that each project has a life equal to the life of the longer length project.

D.

The equivalent annual cost method implicitly assumes that each project has a life equal to the life of the shorter length project.