a new government regulation requires a new water filter at XYZ headquarters. Eng

Question

a new government regulation requires a new water filter at XYZ headquarters. Engineers have proposed two alternatives to meet the regulations. WACC = 12% for the 4 year required project. Proposed project F has an initial investment of 500, Operating Costs of 200 per year. Proposed project G has an initial investment of 300, and operating costs of 300 per year. The overall cost for Project F is about ______ and for Project G is about ____. Therefore, XYZ should select Project ______ because _____.

a) -607; -1215; F; lowest initial investment
b) 1300; 1900; G; highest value
c) -300; -1300; G; best choice because of lower initial investment
d) -1107; -1515; F; lowest expense

Explanation / Answer

c) -300; -1300; G; best choice because of lower initial investment

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