How to calculate the decision to replace equipment with the same life of fixed assets

The decision-making methods used for fixed asset replacement decisions are the net present value method and the net annuity flow method.

(a) The net present value method for equipment replacement decisions with the same life span, the criterion: choose the program with a small total present value of cash outflows

(b) The net annuity flow method for equipment replacement decisions with different life spans, the criterion: choose the program with a small cost of the annuity