Question: Two mutually exclusive projects are being considered: Project A has an NPV of $670,000 and is expected to last 6 years. Project B has an

Two mutually exclusive projects are being considered: Project A has an NPV of $670,000 and is expected to last 6 years. Project B has an NPV of $720,000 and is expected to last 7 years. It is anticipated that if either project is chosen it will be possible to repeat it for the foreseeable future. The cost of capital of the company is 14% per year. By computing and comparing the EAB of the two projects, decide which project the company should accept.

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