Which project has the higher equivalent annual net benefit

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Reference no: EM131014844

The company you work for is trying to decide between two projects. Project 1 costs $200,000 up front, and has an expected life of 5 years, over which it will return $40,000 each of the five years. Project 2 would last for 15 years, costs $1 million up front, and returns $100,000 at the end of each of the 15 years. Assuming a real discount rate of 3.3%, which project has the higher equivalent annual net benefit?

Reference no: EM131014844

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