Project A costs $17,500 initially, has a 4-year life and incurs $1,500 in annual year -end costs.
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Question:
Project A costs $17,500 initially, has a 4-year life and incurs $1,500 in annual year -end costs. Project B costs $20,000 initially, has a-5 year life and incurs $2,000 in annual year-end costs. If the company's required return is 12%, calculate the equivalent annual cost of each project.
Question 9 options:
Project A $6,788; Project B $6,870
Project A $4,220; Project B $4,511
Project A $5,958; Project B $5,776
Project A $3,088; Project B $3,290
Project A $7,262; Project B $7,178
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