Question: A firm is considering two mutually exclusive projects as follows: End of Year 0 1 2 3 Project K -40,000 25,000 20,000 15,000 Project U

A firm is considering two mutually exclusive projects as follows: End of Year 0 1 2 3 Project K -40,000 25,000 20,000 15,000 Project U -30,000 22,000 28,000 Evaluate the project using Equivalent Annual NPV method as well as Replacement Chain NPV method. Which project will you chose and why? Which method of evaluation will you prefer and why?

Hurdle Rate is 10%

just mentioned hurdle rate @10%

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