Question: Annual expenses for two projects have been estimated by a project manager as follows: If the average general price inflation rate is expected to be

Annual expenses for two projects have been estimated by a project manager as follows:

If the average general price inflation rate is expected to be 4% per year and the real rate of interest is 9% per year, show which alternative has the least negative equivalent worth in the base period.

Project B Project A (Real S) EOY (Actual S) atb-0 1 $100,000 $80,000 2 $112,000 $100,000 3 $136,000 $120,000 4 $150,000 $140,000

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