Question
You are evaluating two different projects. Project A costs $60,000, has a 3 years life, and cash inflow of $30,000 per year for 3 years.
You are evaluating two different projects. Project A costs $60,000, has a 3 years life, and cash inflow of $30,000 per year for 3 years. Project B costs $9,000, has a5years life, and a cash inflow of $25,000 per year for5years. The relevant discount rate is 6% p.a. Compute the Annual Equivalent Benefit (AEB) for each project. Which project is preferred?
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Contemporary Financial Management
Authors: James R Mcguigan, R Charles Moyer, William J Kretlow
10th Edition
978-0324289114, 0324289111
