You are deciding to choose between three mutually exclusive projects. a. option1: project X will cost $5000 to install and $4200 a year to run and will last for three years. b. option 2: project Y will cost $6000 to install and $3800 a year to run and will last for four years. c. option 3: project Z will cost $10,000 to install and $400 a year to run and will last forever. Let the WACC = 0.09 Estimate the NPV of project X. Answer for part 1

Estimate the equivalent annuity cost of project X. Answer for part 2

Estimate the NPV of project Y. Answer for part 3

Estimate the equivalent annuity cost of project Y. Answer for part 4

Estimate the NPV of project Z. Answer for part 5

Estimate the equivalent annuity cost of project Z. Answer for part 6

Which option would you choose option 1, 2 or 3?