Project A costs $35,000 initially, has a 4-year life and incurs $4,000 in annual year-end costs. Project B costs $39,000 initially, has a 5-year life and incurs $4,500 in annual year-end costs. If the company's required return is 10%, calculate the equivalent annual cost of each project. Options   Project A $16,788; Project B $15,211   Project A $13,452; Project B $12,924   Project A $15,041; Project B $14,788   Project A $12,623; Project B $11,679   Project A $14,190; Project B $13,250

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Project A costs $35,000 initially, has a 4-year life and incurs $4,000 in annual year-end costs. Project B costs $39,000 initially, has a 5-year life and incurs $4,500 in annual year-end costs. If the company's required return is 10%, calculate the equivalent annual cost of each project.

Options

 

Project A $16,788; Project B $15,211

 

Project A $13,452; Project B $12,924

 

Project A $15,041; Project B $14,788

 

Project A $12,623; Project B $11,679

 

Project A $14,190; Project B $13,250

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