The K&K Company has two alternative investment projects,AandB.

The K&K Company has two alternative investment projects, A and B. A, short-lived project, will cost Rs 150,000 initially and involve annual operating cash expenses of Rs 40,000 for 4 years. B, on the other hand, will cost Rs 200,000 and involve annual operating expenses of Rs 25,000 for 7 years. Projects have no salvage value. The discount rate is 12 per cent. Which project do you recommend?

 

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