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Exercise 4: Projects with Different Time Length There are two projects under consideration: Project A has an NPV of $20m and will last three years.

Exercise 4: Projects with Different Time Length

There are two projects under consideration:

Project A has an NPV of $20m and will last three years.

Project B has an NPV of $60m and will last nine years.

It is anticipated that if either project is chosen it will be possible to repeat it for the foreseeable future. The interest rate is 1% per year. Which project will have a higher EANB and why?

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