Which project has the higher equivalent annual net benefit

Reference no: EM131959639

Question: The company you work for is trying to decide between two projects. Project 1 costs dollar 150,000 up front, and has an expected life of 4 years, over which it will return dollar 47,000 each of the four years. Project 2 would last for 20 years, costs dollar 1.8 million up front, and returns dollar 148,000 at the end of each of the 20 years. Assuming a real discount rate of 5 percentage, which project has the higher equivalent annual net benefit?

Reference no: EM131959639

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