Multiple Choice
The projected cash flows for two mutually exclusive projects are as follows: 
If the firm's cost of capital is 10% and the equivalent annual annuity method is used to eliminate the disparity between the projects' lives, which project should be undertaken?
A) A
B) B
C) Either, because the difference in lives makes a comparison meaningless.
D) A, but the EAAs are so close that either is probably ok.
Correct Answer:
Verified
Correct Answer:
Verified
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