Which project should the firm select

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Question 1: Normal Ltd is considering the following two mutually exclusive projects, Project 1 and Project 2, which project should the firm select? (Note: No calculation is required).

                                               Project Number

                                                    1                     2

Term of Project                6 years              8 years

Net Present Value             $15,623             $18,380

Equivalent Annual Cash Flow    $3,800          $3,700

Select one:

Option a. Choose Project 2 because it has the higher NPV.

Option b. Choose Project 1 because it has the higher equivalent annual cash flow

Option c. Choose Project 1 because it has the lower NPV.

Option d. Choose Project 2 because it has the lower equivalent annual cash flow.

Reference no: EM132578827

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