Multiple Choice
RainMan Inc. is in the business of producing rain upon request. They must decide between two investment projects; a new airplane for seeding rain clouds or a new weather control machine built by Dr. Nutzbaum. The discount rate for the new airplane is 9%, while the discount rate for the weather machine is 39% (it happens to be higher risk) . Which investment should the company select and why? 
A) Airplane because is has a higher NPV
B) Weather machine because is has a higher NPV
C) Airplane because is has a higher annuity
D) Weather machine because is has a higher annuity
Correct Answer:
Verified
Correct Answer:
Verified
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