TA is considering investing in one of the following two
projects, where the chosen project will be replicated repeatedly in
the future:
Project X
Project Y
Initial investment
$100,000
$125,000
Life of project
3 years
4 years
Annual after-tax cash flows
Year 1: $45,000
Year 1: $47,000
Year 2: $45,000
Year 2: $47,000
Year 3: $70,000
Year 3: $47,000
Year 4: $67,000
Required rate of return
10%
10%
Which project is most beneficial for TA, and what is its
EAA?...