Carlyle Inc

Multiple Choice

Carlyle Inc.is considering two mutually exclusive projects.Both require an initial investment of $14,200 at t = 0.Project S has an expected life of 2 years with after-tax cash inflows of $7,400 and $13,600 at the end of Years 1 and 2,respectively.In addition,Project S can be repeated at the end of Year 2 with no changes in its cash flows.Project L has an expected life of 4 years with after-tax cash inflows of $6,000 at the end of each of the next 4 years.Each project has a WACC of 9%.What is the equivalent annual annuity of the most profitable project? Do not round your intermediate calculations.

A) $2,294.25
B) $2,156.59
C) $1,358.20
D) $2,454.85
E) $1,616.90