Chandler tire co. is trying to decide which one of two projects it should accept. both projects have the same start-up costs. project 1 will produce annual cash flows of $52,000 a year for six years. project 2 will produce cash flows of $48,000 a year for eight years. the company requires a 15 percent rate of return. which project should the company select and why? rev: 09_30_2016_qc_cs-63898 project 1, because the annual cash flows are greater by $4,000 than those of project 2 project 1, because the present value of its cash inflows exceeds those of project 2 by $14,211.62 project 2, because the total cash inflows are $72,000 greater than those of project 1 project 2, because the present value of the cash inflows exceeds those of project 1 by $18,598.33 it does not matter as both projects have almost identical present values.
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