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50. RainMan Inc. is in the business of producing rain upon request. They must decide between two investment projects; a new airplane for seeding rain

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50. RainMan Inc. is in the business of producing rain upon request. They must decide between two investment projects; a new airplane for seeding rain clouds or a new weather control machine built by Dr. Nutzbaum. The discount rate for the new airplane is 9%, while the discount rate for the weather machine is 39% (it happens to be higher risk). Which investment should the company select and why? Year Airplane Weather Machine 0 -900 -900 l 500 550 2 600 600 3 685 A. Airplane because is has a higher NPV B. Weather machine because is has a higher NPV C. Airplane because is has a higher annuity D. Weather machine because is has a higher annuity

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