A company is considering the purchase of one of two mutually

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Reference no: EM13803858

A company is considering the purchase of one of two mutually exclusive projects for improving its assembly line. The company plans to use a 12% cost of capital for evaluating these two equal-risk projects. The initial outlay and annual cash flows over the life of each project are shown in the following table:

Year	0	1	2	3	4
L	-$130,000	35,000	5,500	62,000	81,000
S	-$94,500	56,000	57,000

Reference no: EM13803858

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