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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 five 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 6%, which unit would you recommend?

t =

0

1

2

3

4

5

A

-500

-50

-50

-75

-75

-75

B

-100

-150

-150

-150

-175

-200

Group of answer choices

Indifferent

A; B

B ; A

B ; B

A ; A

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