Question: Multiple Choice: i Theresa is currently evaluating two mutually exclusive projects which have the following after-tax net cash flows. Both projects have a cost of

Multiple Choice: i Theresa is currently evaluating two mutually exclusive projects

Multiple Choice: i Theresa is currently evaluating two mutually exclusive projects which have the following after-tax net cash flows. Both projects have a cost of capital of 13%. Calculate the EAA (Equivalent Annual Annuity) payments for Projects L and S, then make a decision as to which project should be chosen. 0 1 2 Project S: (4500) 3000 2500 0 1 2 3 4 Project L: (4500) 1900 1600 1200 1700 a. Choose Project L since its EAA payment is $54.35 greater than the EAA of Project S. b. Choose Project L since its EAA payment is $36.22 greater than the EAA of Project S. c. Choose Project L since its EAA payment is $65.90 greater than the EAA of Project S. d. Choose Project L since its EAA payment is $117.51 greater than the EAA of Project S. Choose Project L since its EAA payment is $54.35 less than the EAA of Project S. e

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