What is the equivalent annual annuity

Reference no: EM131488604

Question: (Calculation equivalent annual annuity) Industrial Zone Group, which operates in building industry in South Caucasus, is considering making investments in regional projects. The CEO of the group was offered two projects regarding financing. Project 1 requires an initial investment of $100,000 and will last 8 years; it will generate $20,000 per year. Project 2 requires an initial investment of $150,000; this project will last 10 years and will generate $28,000 per year. Which project should be taken? Why? The required rate of return is 12 percent.

Reference no: EM131488604

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