Summary
A basis for comparison is just a common frame of reference for consistently comparing two or more cash-flow streams. It's a use of equivalence that helps you meaningfully compare proposals. Six different bases were discussed in this chapter:
Present worth— What is the equivalent value (at a given interest rate) of the cash-flow stream, expressed as a single amount of money at the beginning of the proposal?
Future worth— What is the equivalent value of the cash-flow stream, expressed as a single amount of money at the end of the proposal?
Annual equivalent— What is the equivalent value of the cash-flow stream, expressed as a series of equal amounts at regular intervals over the duration of the proposal?
Internal rate of return— Instead ...
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