Larkspur Inc. now has the following two projects available:
Project Initial CF After-tax CF1 After-tax CF2 After-tax CF3
1 -11,536.03 5,500 6,500 10,000
2 -3,307.90 4,000 3,400
Assume that $R_f$ = 5.5 percent, risk premium = 11.0 percent, and beta = 1.3. Use the EANPV approach to determine which project Larkspur Inc. should choose if they are mutually exclusive. (Round cost of capital and final answers to 2 decimal places, e.g.17.35% or 2,513.25.)
PMT1 $
PMT2 $
should be chosen.