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3 5 points Projects ABC and DEF have the same WACC of 8%. Project ABC has a project life of 4 years while Project
3 5 points Projects ABC and DEF have the same WACC of 8%. Project ABC has a project life of 4 years while Project DEF has a project life of 3 years. Both projects are repeatable. They have the following project cash flows. Using the Equivalent Annual Annuity (EAA) Method, calculate the value of $Y such that investors are indifferent between the 2 projects i.e.,the EAA of both projects are the same. Year Cash Flow (ABC) 0 1 2 3 4 -$10,000 $2,000 Cash Flow (DEF) -$10,000 $Y $Y $5,000 $8,000 $Y $12,000
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