Adjust the npv for unequal lives with the equivalent

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Question: Singing Fish Fine Foods has ?$2,000,000 for capital investments this year and is considering two potential projects for the funds. Project 1 is updating the? store's deli section for additional food service. The estimated? after-tax cash flow of this project is ?$600,000 per year for the next five years. Project 2 is updating the? store's wine section. The estimated annual? after-tax cash flow for this project is ?$530,000 for the next six years. If the appropriate discount rate for the deli expansion is 9.5?% and the appropriate discount rate for the wine section is 9.0?%, use the NPV to determine which project Singing Fish should choose for the store. Adjust the NPV for unequal lives with the equivalent annual annuity. Does the decision? change?

Reference no: EM133328246

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