Use these cash flows to answer the following questions: Year 0 1 2 3 4 5...

Use these cash flows to answer the following questions:

Year 0 1 2 3 4 5 6

A (4,000) 800 1,400 1,300 1,200 1,100 1,000

B (2,000) 700 1,300 1,200 0 0 0

a. Calculate the NPV for projects A and B using a 20 percent discount rate (write the calculate keys that you use to get the answer).

b Calculate the Equivalent Annual Annuity (EAA) for projects A and B using a 20 percent discount rate (write the calculate keys that you use to get the answer).

c. If the projects were mutually exclusive which project would you choose and which decision criteria would you use and why.

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Expert Solution

jeff jeffy answered 1 year ago

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