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Atlantic Constructive Creations is considering two mutually-exclusive projects, W and X. Project W has an initial cost of $2,000 and generates $700 each year for
Atlantic Constructive Creations is considering two mutually-exclusive projects, W and X. Project W has an initial cost of $2,000 and generates $700 each year for 5 years. Project X has an initial cost of $1,000 and generates $700 each year for 3 years. The company's cost of capital for these capital expenditures is 5.0%. The NPV of Project W is $1,030.63 and the NPV of Project X is $906.27. Accounting for the unequal lives of these projects, which should the firm choose? a) Project W as it has the higher NPV. b) Project W as it has the higher EANPV. c) You accept both projects as they both have positive NPVs. d) None of the above statements are correct
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