Wilson Co Is Considering Two Mutually Exclusive Projects

question 5

Multiple Choice

Wilson Co. is considering two mutually exclusive projects. Both require an initial investment of $10,000 at t = 0. Project X has an expected life of 2 years with after-tax cash inflows of $6,000 and $8,500 at the end of Years 1 and 2, respectively. Project Y has an expected life of 4 years with after-tax cash inflows of $4,600 at the end of each of the next 4 years. Each project has a WACC of 11%. What is the equivalent annual annuity of the most profitable project?

• A) $1,345.50
• B) $1,346.30
• C) $1,361.52
• D) $1,376.74
• E) $1,411.15

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Definitions:

Minimize Distractions

Efforts made to reduce or eliminate factors that divert attention from the task at hand.

Short Text Messages

Brief written messages, typically sent via mobile phones or online platforms, used for quick communication.

Interruptions

Unplanned or unexpected disturbances that break the continuity of an activity or conversation.

"You" Attitude

A communication style that focuses on and prioritizes the needs, interests, and feelings of the audience.