Question: ST Inc. is considering two mutually exclusive projects. Both require an initial investment of $13,900 at t = 0. Project S has an expected life

ST Inc. is considering two mutually exclusive projects. Both require an initial investment of $13,900 at t = 0. Project S has an expected life of 2 years with after-tax cash inflows of $7,100 and $13,300 at the end of Years 1 and 2, respectively. In addition, Project S can be repeated at the end of Year 2 with no changes in its cash flows. Project L has an expected life of 4 years with after-tax cash inflows of $5,400 at the end of each of the next 4 years. Each project has a WACC of 9%. What is the equivalent annual annuity of the most profitable project? Do not round your intermediate calculations.

	a.	$2,164.79
	b.	$2,208.09
	c.	$1,905.01
	d.	$1,109.51
	e.	$1,120.60

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