A construction business is contemplating acquiring one of two competitors, they can afford to acquire only one of them. As part of your role as project manager your finance director has asked you to assess the financial viability and benefits of acquiring the two competitors, A and B. The following information has been made available:

The initial capital outlays, in m, for each of the two competitors have been estimated as:

Competitor A = 24.00

Competitor B = 22.00

The anticipated annual revenues for each of the two potential acquisitions has been estimated in m for the proposed investment period of 9 years.

YEAR

Competitor A

Competitor B

1

2.00

1.00

2

4.50

3.50

3

5.75

6.00

4

7.50

8.50

5

9.00

10.00

6

9.50

10.00

7

8.50

9.50

8

7.00

8.50

9

5.00

7.00