Question: A company is considering two projects and must do one of them. Project A requires an investment of $38,000. Estimated annual receipts for 5 years

A company is considering two projects and must do one of them. Project A requires an investment of $38,000. Estimated annual receipts for 5 years are $14,600; estimated annual costs are $5,000. Alternatively, Project B requires an investment of $68,000, has annual receipts for 5 years of $17,000, and has annual costs of $4,000. Assume both projects have a $10,000 salvage value and that MARR is 13%/year.

what is the annual worth of project A?

what is the annual worth of project B?

which project should be recommended?

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