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

  1. 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 $20 million. What is the Equivalent Annual Annuity for Project B?

    a.

    $3.62 Million
    b.

    $5 million
    c.

    $ 4.10 million
    d.

    $4.44 million
    e.

    None of the above

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