What equivalent annual interest rate is second contractor

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Reference no: EM13147532

You are a project engineer and you have to make a choice between two contractors to perform some rebuilding work on a manufacturing facility. One contractor proposes that he will do the work for $1,300,000 payable immediately. The other contractor proposes that he will perform the same job for $1,400,000 payable in eight equal quarterly payments, starting 3 months after the job begins. A nominal rate of 14% should be used as the MARR.What equivalent annual interest rate is the second contractor offering? Which contractor’s offer would you accept? Repeat the analysis with the NPV technique.

Reference no: EM13147532

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