Calculate the equivalent annual net costs

Reference no: EM131926006

Question: Consider the costs of 2 investments with different lives as listed below:

Project	Initial Cost	Annual Net Costs	Life (years)
A	$40,000	$2,800	4
B	$28,000	$4,400	3

Make comparisons of these projects to establish which has higher/lower present values of their costs. Use the "rollover" method to establish equal project lives and also calculate the equivalent annual net costs, using a discount rate of 10% to calculate the annuity factor.

Reference no: EM131926006

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