Question
Austin Jack Inc. is considering the following machines Machine A Machine B Cost $500,000 $260,000 Expected Life 6 years 3 years CF/Year $220,000 $200,000 Assume
Austin Jack Inc. is considering the following machines Machine A Machine B Cost $500,000 $260,000 Expected Life 6 years 3 years CF/Year $220,000 $200,000 Assume that the cost of capital is 12 percent.
15. What is the NPV for project A? *
A. $380,605
B. $404,510
C. $905,215
D. $510,000
E. None of the above
16. What is the NPV for project B? *
A. $220,366
B. $480,366
C. $740,366
D. $350,366
E. None of the above
17. What is the Equivalent Annual Annuity (EAA) for project A? *
A. $105,120
B. $98,387
C. $88,312
D. $77,200
E. None of the above
18. What is the Equivalent Annual Annuity (EAA) for project B? *
A. $91,749
B. $75,822
C. $108,200
D. $65,410
E. None of the above
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