Question 7 (1 point)

Walker & Campsey wants to invest in a new computer system, and management has narrowed the choice to Systems A and B. System A requires an up-front cost of $100,000, after which it generates positive after-tax cash flows of $60,000 at the end of each of the next two years. System B also requires an up-front cost of $100,000, after which it generates positive after-tax cash flows of $48,000 at the end of each of the next three years. The companys cost of capital is 11%. Based on the equivalent annual annuity, which system will be chosen?

Question 7 options:

	B,$1,622.88
	B,$7,083.47
	A,$7,083.47
	A,$1,622.88