Question: Project A and B are mutually exclusive. Project A has a 5 year life and project B has a 7 year life. The cost of

Project A and B are mutually exclusive. Project A has a 5 year life and project B has a 7 year life. The cost of capital for both projects is 10%. The NPV of project A is $13.72 million while the NPV of Project B is $21.61 million. What is the Equivalent Annual Annuity for Project B?

a.

$3.62 Million
b.

$5 million
c.

$ 21.61 million
d.

$4.05 million
e.

Cannot be determined from the information

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