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You are deciding to choose between two mutually exclusive projects. a. option 1: project X will cost $6,000 to install and $3200 a to run
You are deciding to choose between two mutually exclusive projects. a. option 1: project X will cost $6,000 to install and $3200 a to run year and will last for three years. b. option 2: project Y will cost $7,000 to install and $2800 a to run year and will last for four years. Let the WACC = 0.08 Estimate the NPV of project X. Estimate the Equivalent annuity cost of project X Estimate the NPV of project Y. Estimate the Equivalent annuity cost of project Y. Which option would you choose option 1 or 2
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