Question
Project A has the following cash flows: Year CF 0 -40,000 1 8,000 2 14,000 3 13,000 4 12,000 5 11,000 6 10,000 Project B
Project A has the following cash flows:
Year CF 0 -40,000 1 8,000 2 14,000 3 13,000 4 12,000 5 11,000 6 10,000
Project B has the following cash flows:
Year CF 0 -20,000 1 7,000 2 13,000 3 12,000
Assuming that the required rate is 12%, what is the Equivalent Annual Annuity (EAA) for the two projects? Based on the EAA, which project is better?
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Managerial Accounting
Authors: James Jiambalvo
3rd Edition
0470038152, 978-0470038154
