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Question: three mutually exclusive projects are being considered a b c...

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Three mutually exclusive projects are being considered:

A                           B                          C

Initial cost             $100                     $150                     $200

Annual benefit       $10                      $17.62                   $55.48

Useful life. infinite 20 years 5 years

  1. Construct a choice table for interest rates from 0%-100%. Also – provide a plot of either PW or EAW as a function of i.

b. The firm wants 8% rate of return on investments. Which equipment should be purchased?

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