Carlyle Inc

question 31

Multiple Choice

Carlyle Inc.is considering two mutually exclusive projects.Both require an initial investment of $14,200 at t = 0.Project S has an expected life of 2 years with after-tax cash inflows of $7,400 and $13,600 at the end of Years 1 and 2,respectively.In addition,Project S can be repeated at the end of Year 2 with no changes in its cash flows.Project L has an expected life of 4 years with after-tax cash inflows of $6,000 at the end of each of the next 4 years.Each project has a WACC of 9%.What is the equivalent annual annuity of the most profitable project? Do not round your intermediate calculations.

• A) $2,294.25
• B) $2,156.59
• C) $1,358.20
• D) $2,454.85
• E) $1,616.90

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Definitions:

Mucus Thickens

A condition where the mucus becomes more viscous, often leading to congestion and difficulty in breathing or clearing passages.

Meconium Ileus

A blockage of the small intestines caused by thick, sticky meconium in newborn babies, often associated with cystic fibrosis.

Cystic Fibrosis

A genetic disorder that affects the lungs, pancreas, and other organs, leading to thick sticky mucus production, which causes respiratory and digestive problems.

Foul-Smelling Stools

A symptom often associated with gastrointestinal problems, where the stool exudes an unusually strong, bad odor, indicating possible infections or malabsorption issues.