You are deciding to choose between three mutually exclusive projects. a. option1: project X will cost $5000 to install and $4300 a year to run and will last for three years. b. option 2: project Y will cost $6000 to install and $3600 a year to run and will last for four years. c. option 3: project Z will cost $10,000 to install and $500 a year to run and will last forever. Let the WACC = 0.08

Estimate the equivalent annuity cost of project Y.

Estimate the NPV of project Z.

Estimate the equivalent annuity cost of project Z.

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