Question: You are deciding to choose between three mutually exclusive projects. a. optionl: project X will cost $5000 to install and $4300 a year to run
You are deciding to choose between three mutually exclusive projects. a. optionl: project X will cost $5000 to install and $4300 a year to run and will last for three years. b. option 2: project Y will cost $6000 to install and $3800 a year to run and will last for four years. c.option 3: project Z will cost $10,000 to install and $400 a year to run and will last forever. Let the WACC = 0.06 Estimate the NPV of project X. Estimate the equivalent annuity cost of project X. Estimate the NPV of project Y. Estimate the equivalent annuity cost of project: Estimate the NPV of project Z. Estimate the equivalent annuity cost of project Z. Which option would you choose option 1 2 or 33
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