Question: You are considering the following 2 mutually exclusive projects. Using the equivalent annual annuity method and a cost of capital of 1 0 % ,

You are considering the following 2 mutually exclusive projects. Using the equivalent annual annuity method and a cost of capital of 10%, which project should be selected? (Round to nearest R) Project A has the following cash flows(year0:20,000,Year1:15,000, year2:20,000, Project B Year Cash Flow Cashflow (year0:20,000, year1:5,000, year2:10,000,year3:15,000,year4:50,000).
a.
Project B because of an EAA of R12,060
b.
Project A because of an EAA of R5,857
c.
Project B because of an EAA of R38,320
d.
Project A because of an EAA of R10,165

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