214 Exercise 9. 215 A company is considering the purchase of a new plant; Plant A costs 30,000, last for 4 years and produce cash flow of 8,000 per year, 216 Plant B cost 9,000, lasts for 3 years and produce annual cash flows of,4,000. 217 Assuming a 5% required rate of return on both projects, compute their EAA equivalent annual annuity 218 219 220 Initial CF 221 Year 1 222 Year 21 223 Year 3 224 Year 4 225 226 227 228 229 230 231 2321 Plant A Plant B 30,000 -9,000 8,000 4,000 8,000 4,000 8,000 4,000 8,000 +