NPV unequal

lives.

Singing Fish Fine Foods has

$1,830,000

for capital investments this year and is considering two potential projects for the funds. Project 1 is updating the store's deli section for additional food service. The estimated after-tax cash flow of this project is

$650,000

per year for the next five years. Project 2 is updating the store's wine section. The estimated annual after-tax cash flow for this project is

$540,000

for the next six years. If the appropriate discount rate for the deli expansion is

9.6%

and the appropriate discount rate for the wine section is

9.0%,

use the NPV to determine which project Singing Fish should choose for the store. Adjust the NPV for unequal lives with the equivalent annual annuity. Does the decision change?