Consider the cash flows for the following two projects:
n A B
0 -$15,000 -$20,000
1 $3,000 $2,600
2 $X $6,400
3 $3,000 $9,150
4 $3,000 $12,100
5 $3,000 $13,120
(a) For project A, find the value of X that makes the equivalent annual receipts equal the equivalent annual disbursement at i=8%
(b) Would you accept project B at i=10% based on AE criterion?