Question: 2. Consider the cash flows for the following two projects: n A B 0 -$15,000 -$20,000 1 $3,000 $2,600 2 $X $6,400 3 $3,000 $9,150

2. Consider the cash flows for the following two projects:

n A B 0 -$15,000 -$20,000 1 $3,000 $2,600 2 $X $6,400 3 $3,000 $9,150 4 $3,000 $12,100 5 $3,000 $13,120

(a) For project A, find the value of X that makes the equivalent annual receipts equal the equivalent annual disbursement at i=8% (b) Would you accept project B at i=10% based on AE criterion?

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