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Can you show me how to get the answer it in Excel? Farma Biomedical, Inc. has only one production facility and must decide between two
Can you show me how to get the answer it in Excel?
Farma Biomedical, Inc. has only one production facility and must decide between two possible investments for the facility. Each has different cash flows and a different life span. Given the forecasted cash flows below and using the equivalent annual annuity approach, decide which project is a better investment. The company's cost of capital is 11.5%. Year 4 Cash Flows ($ millions) Year 1 Year 2 $ 100 $ 170 $ 90 $ 110 Year o $ (295) $ (305) Project A Project B Year 3 $ 225 $ 180 $ 200 a. What is the equivalent annual annuity of Project A? (Enter your answer in millions, rounded to two decimal places.) Equivalent annual annuity of Project A million b. What is the equivalent annual annuity of Project B? (Enter your answer in millions, rounded to two decimal places.) Equivalent annual annuity of Project B million c. Which project is a better investment? O Project B O Project AStep by Step Solution
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