Question: You are evaluating two different projects. Project A costs $55,000, has a 3 years life, and a cash inflow of $22,500 per vear for 3

You are evaluating two different projects. Project A costs $55,000, has a 3 years life, and a cash inflow of $22,500 per
vear for 3 ears. Project B costs $65,000, has a 5 years life, and a cash inflow of $17,000 per year for 5 years. The
relevant discount rate is 6% p.a. Compute the Equivalent Annual Benefit (EAB) for project A only. Which project is
preferred? The EA of project A is $1,923.97.

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