Question: Providing 2 projects : Project A Project B Capital Cost $1,000,000 $2,000,000 Annual Operating Cost $100,000 $15,000 Useful Life 20 years 25 years 1. Assuming

Providing 2 projects :

Project A

Project B

Capital Cost

$1,000,000

$2,000,000

Annual Operating Cost

$100,000

$15,000

Useful Life

20 years

25 years

1. Assuming values for each of these, outline the analysis needed to evaluate these options.

2. If project B were eligible for a low-interest loan, but project A were not, how would this affect your analysis?

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