Question: 17) Haley graphic designs is considering two alternative projects. both have initial cash outlays of $10,000. Project has an expected life of two years with
17) Haley graphic designs is considering two alternative projects. both have initial cash outlays of $10,000. Project has an expected life of two years with after-tax cash inflows of $6000 and $8000 at the end of 1 and 2 years respectively. project B has an expected life of four years with after-tax cash inflows of $4000 at the end of each of the next 4 years. The firm cost of capital is 10%. using replacement chain which project would you pick?
18) Using the information from #17 use the equivalent annuity approach to decide which project is better.
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