Based on the cashflows of Projects A and B, and the rate of return, the project that Rundle Enterprises should be pick is Project A.
<h3>Why should Rundle Enterprises pick Project A?</h3>
The project that should be picked is the project with the higher net present value.
The net present value of Project A can be found as:
= Present value of cash flows - Initial cash expenditure
= (36,113 x present value interest factor for an annuity, 8%, 5 years) - 108,000
= 36,113 x 3.99271 - 108,000
= $36,188.74
The net present value of B is therefore:
= 9,612 x 3.99271 - 33,000
= $5,377.93
Project A has the higher present value and should be selected.
Find out more on net present value at brainly.com/question/18848923
#SPJ1
