You are deciding to choose between two mutually exclusive projects. a. option1: project X will cost $6,000 to install and $3000 a to run year and will last for three years. b. option 2: project Y will cost $7,000 to install and $2600 a to run year and will last for four years. Let the WACC = 0.09 Estimate the NPV of project X.

1 Estimate the Equivalent annuity cost of project X.

2 Estimate the NPV of project Y.

3 Estimate the Equivalent annuity cost of project Y. 4 Which option would you choose option 1 or 2?