Question: Use Table 1 to answer the following questions: (a) Using the Net Present Value method, which of the two projects will you recommend for implementation?

Use Table 1 to answer the following questions: (a) Using the Net Present Value method, which of the two projects will you recommend for implementation? (b) Using the Rate of Return method, which of the two projects will you recommend? (c) Using the Benefit-Cost Ratio method, which of the two projects will you recommend? Please show your calculations and state your reasons for all three scenarios. Table 1: Life-Cycle Analysis Data

Project A Project B
Capital cost = $10,000,000 Capital cost = $9,000,000
Annual Operating and Maintenance cost = $500,000 Annual Operating and Maintenance cost = $350,000
Reduction in annual user cost = $5,000,000 Reduction in annual user cost = $4,000,000
Project Life = 30 years Project life = 25 years
Discount rate = 4% Discount rate = 5%
Salvage value = $3,500,000 Salvage value = $3,000,000

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