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 percent, while the discount rate for the weather machine is 39 percent (it happens to have higher market risk) . Which investment should the company select and why? (Assume a 0 percent inflation rate and that projected costs do not change over time.) 
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, because it has a higher equivalent annual cash flow
Correct Answer:
Verified
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