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JC Inc. must install a new air-conditioning unit in its main plant. It is evaluating two different models: A and B; both are expected to
JC Inc. must install a new air-conditioning unit in its main plant. It is evaluating two different models: A and B; both are expected to last six years and are equally efficient. The cash flows (in millions) are listed below. JCs WACC is 8%. What unit would you recommend? If WACC changes to 10%, which unit would you recommend?
t = | 0 | 1 | 2 | 3 | 4 | 5 | 6 |
A | -150 | -125 | -125 | -175 | -175 | -200 | -200 |
B | -550 | -55 | -55 | -75 | -75 | -100 | -100 |
Group of answer choices
Indifferent
B ; B
A; B
B ; A
A ; A
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