Capital budgeting techniques, for example, NPV, IRR, Profitability index, payback and etc..
Suppose I have a project to pursue as discussed below:
There are two choices, the first system costs $50,000 and is expected to last 10 years, and the second system
costs $72,000 and is expected to last 15 years. Assume that the opportunity cost of capital is 10 percent. In
this project, the life of two systems are different.
Which capital budgeting technique would better answer the question and why?