Firm is considering two mutually exclusive projects

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The Dickerson PR Firm is considering two mutually exclusive projects with useful lives of 3 and 6 years. The after-tax cash flows for projects S and L are listed below. Year Cash Flow S Cash Flow L 0 -$60,000 -$51,500 1 40,000 13,000 2 20,000 19,000 3 17,000 11,000 4 20,000 5 10,000 6 8,000 Calculate the equivalent annual annuity for each project assuming a required return of 15%. What decision should be made?

Reference no: EM131053095

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