Calculate the eaa for both projects

Reference no: EM13297194

Your firm has the opportunity to choose between the following two mutually exclusive projects: Expected Net Cash Flows Year Project S Project L 0 -500,000 -575,000 1 295,000 183,500 2 295,000 183,500 3 183,500 4 183,500 The projects provide a necessary service, so whichever project is selected that project is expected to be repeated into the foreseeable future. Both projects have a 10 percent cost of capital. Calculate the EAA for both projects and explain your rationale in selecting the best project.

Reference no: EM13297194

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