Tonny is currently evaluating two mutually exclusive projects. Both projects have a cost of capital of 12% and can be replicated indefinitely with the same cash flows. Calculate the EAA (Equivalent Annual Annuity) payment for just Project L. t = 0 1 Project S: ..... A. $34.12 B. $36.91 C. $38.74 D. $40.23 E. $42.87 t= 0 Project L: (8700) .. 1 6500 2 ----------| 2 2500 (8700) 6800 3 1400 3400

Tonny is currently evaluating two mutually exclusive projects. Both projects have a cost of capital of 12% and can be replicated indefinitely with the same cash flows. Calculate the EAA (Equivalent Annual Annuity) payment for just Project L. t = 0 1 Project S: ..... A. $34.12 B. $36.91 C. $38.74 D. $40.23 E. $42.87 t= 0 Project L: (8700) .. 1 6500 2 ----------| 2 2500 (8700) 6800 3 1400 3400

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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