years. Another is to install a public swimming pool with an expected life also of eight years. The basketball court would costP180,000 to construct and yield net benefits of P40,000 at the end of each of the eight years.The swimming pool would cost P1.05 million to construct and yield net benefits of P170,000at the end of each of the eight years. Each project is assumed to have zero salvage value at the end of its life. Using a real discount rate of 5 percent, which project offers larger net benefits?
Fig: 1