Question
Project A returns $800000 the first year, $200000 the second year and $200000 the third year Project B returns $200000 the first year, $800000 the
Project A returns $800000 the first year, $200000 the second year and $200000 the third year
Project B returns $200000 the first year, $800000 the second year and $200000 the third.
Mr. Smith was approached by external consultants who were offering two investment projects suiting the companys business strategy.
Project A. Capital outlay of $1000000, 10-year life, and 10% discount rate
Project B. Capital outlay $1600000, 15-year life, and 10% discount rate
Help the team of financial managers to compute the equivalent annual costs for both projects and to make an investment decision.
Question 5: What are the equivalent annual costs for the project A and project B? Which one is a better investment option for Amazing Integration Ltd.?
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Financial Management For Public, Health, And Not-for-Profit Organizations
Authors: Steven A. FinklerDaniel L. Smith, Thad D. Calabrese
6th Edition
978-1506396811, 150639681X
