• The first project is a process optimization which would result in a cost reduction of $120,000 per year.This benefit would be achieved immediately after the end of the project.
• The second project would be the development of a new product which could produce the following net profits after the end of the project:
  

  1	year:	$ 15,000
  2	year:	$ 125,000
  3	year:	$ 220,00

  Assumed is a discount rate of 5 % per year.Looking at the present values of these projects’ revenues in the first 3 years, what is true?

A. Both projects are equally attractive.
B. The first project is more attractive by app.7%.
C. The second project is more attractive by app.5%.
D. The first project is more attractive by app.3%.

answer => D