Question: Use the following data to answer Question 16: CAT Inc. is planning to purchase a truck. Thus, The company is considering the following trucks: Truck
Use the following data to answer Question 16: CAT Inc. is planning to purchase a truck. Thus, The company is considering the following trucks: Truck A Truck B Cost $500,000 $260,000 Expected Life 6 years 3 years CF/Year $220,000 $200,000 Assume that the cost of capital is 12 percent. 16. Which project should the company choose? * O A. Truck A; since EEA of Truck A is greater than EEA of Truck B. O B. Truck B; since EEA of Truck B is less than EEA of Truck A. O C. Both Trucks since the EEA of both trucks is positive. O D. None of the above
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