RainMan Inc.is in the business of producing rain upon request.They must decide between two investment projects: a new airplane for seeding rain clouds or a new weather control machine built by Dr.Nutzbaum.The discount rate for the new airplane is 9%,while the discount rate for the weather machine is 39% (it happens to have higher market risk).Which investment should the company select and why? (Assume a 0% inflation rate and that projected costs do not change over time.) $$\begin{array} { l c c }
\text { Year } & \text { Airplane } & \text { Weather Machine } \
\hline 0 & - 900 & - 900 \
1 & 500 & 550 \
2 & 600 & 600 \
3 & & 685
\end{array}$$
A)Airplane because it has a higher NPV
B)Weather machine because it has a higher NPV
C)Airplane because it has a higher equivalent annual cash flow
D)Weather machine beca

Question

RainMan Inc.is in the business of producing rain upon request.They must decide between two investment projects: a new airplane for seeding rain clouds or a new weather control machine built by Dr.Nutzbaum.The discount rate for the new airplane is 9%,while the discount rate for the weather machine is 39% (it happens to have higher market risk).Which investment should the company select and why? (Assume a 0% inflation rate and that projected costs do not change over time.) $$\begin{array} { l c c } 
\text { Year } & \text { Airplane } & \text { Weather Machine } \
\hline 0 & - 900 & - 900 \
1 & 500 & 550 \
2 & 600 & 600 \
3 & & 685
\end{array}$$
A)Airplane because it has a higher NPV
B)Weather machine because it has a higher NPV
C)Airplane because it has a higher equivalent annual cash flow
D)Weather machine beca

Quizplus · Accepted Answer

The Answer of RainMan Inc.is in the business of producing rain upon request.They must decide between two investment projects: a new airplane for seeding rain clouds or a new weather control machine built by Dr.Nutzbaum.The discount rate for the new airplane is 9%,while the discount rate for the weather machine is 39% (it happens to have higher market risk).Which investment should the company select and why? (Assume a 0% inflation rate and that projected costs do not change over time.) $$\begin{array} { l c c } 
\text { Year } & \text { Airplane } & \text { Weather Machine } \
\hline 0 & - 900 & - 900 \
1 & 500 & 550 \
2 & 600 & 600 \
3 & & 685
\end{array}$$
A)Airplane because it has a higher NPV
B)Weather machine because it has a higher NPV
C)Airplane because it has a higher equivalent annual cash flow
D)Weather machine beca

RainMan Inc A)Airplane Because It Has a Higher NPV B)Weather Machine Because

RainMan Inc A)Airplane Because It Has a Higher NPV
B)Weather Machine Because