Question
Reliance Industries is considering two mutually exclusive projects. Both require an initial investment of $10,000 at t = 0. Project Green has an expected life
Reliance Industries is considering two mutually exclusive projects. Both require an initial investment of $10,000 at t = 0. Project Green has an expected life of 2 years with after-tax cash inflows of $6,000 and $8,500 at the end of Years 1 and 2, respectively. Project Brown has an expected life of 4 years with after-tax cash inflows of $4,600 at the end of each of the next 4 years. Each project has a WACC of 11%. What is the equivalent annual annuity of the most profitable project? Group of answer choices
$1,376.74
$1,345.50
$1,346.30
$1,411.15
$1,361.52
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