There are two potential projects, P and Q, with different life horizons Specifically, P will last for 5 years and Q will last for 7 years Their cash flows are illustrated in the following table The cost of capital is 15 The difference in their equivalent annual benefits (P minus Q) is closest to 0 09 0 19 0 29 0 39 Year P Q 0 73 71 1 30 25 2 30 25 3 30 25 4 30 25 5 6 30 25 25 7 25

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Question: There are two potential projects, P and Q, with different life horizons. Specifically, P will last for 5 years and Q will last for 7

There are two potential projects, P and Q, with different life horizons. Specifically, P will last for 5 years and Q will last for 7 years. Their cash flows are illustrated in the following table.

There are two potential projects, P and Q, with different life horizons.

The cost of capital is 15%. The difference in their equivalent annual benefits (P minus Q) is closest to:

0.09
0.19
0.29
0.39

Year P Q 0 -73 -71 1 30 25 2 30 25 3 30 25 4 30 25 5 6 30 25 25 7 25

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