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A company is considering two average-risk alternative ways of producing a product. Process A has a cost of $8,500 and will produce net cash flows
A company is considering two average-risk alternative ways of producing a product. Process A has a cost of $8,500 and will produce net cash flows of $5,000 per year for 2 years. Process B will cost $11,500 and will produce cash flows of $4,000 per year for 4 years. The company can extend each of the two alternatives as needed. The cash inflows occur at the end of each year, and this companys cost of capital is 8 percent. What is the EAA of the worse project? (please show work)
A.428.66
B.328.66
C.233.46
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