Calculate the eanb for each project

Reference no: EM13179558

An analyst assesses two alternatives: (1) a ring levee with a 20-year life and (2) floodwalls with a 60-year life, both designed to prevent river flood damage to neighboring residential properties. Suppose the NPV for the 20-year ring levee is $3 million and the NPV for the 60-year floodwall is $5 million, both discounted at 5%. Calculate the EANB for each project. Then, use the replication method to determine which project should be adopted.
Note: EANB is (net present value) / (annuity factor).

Reference no: EM13179558

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