Calculate the npv for each project over its life. which pro

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Bates Corporation is considering two mutually exclusive projects. The initial outlay and annual cash flows over the life of each project are given in the following table:

Year	0	1	2	3	4
S	-$150,000	20,000	30,000	50,000	60,000
Q	-$100,000	55,000	65,000

Assume the appropriate discount rate for both projects is 11%.

(A) Calculate the NPV for each project over its life. Which project should the company accept based on NPV?

(B) Calculate equivalent annuity for each project. Which project should the company accept based on equivalent annuity?

Reference no: EM13804862

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