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7. Unequal project fives Allied Biscuit Co, has to choose between two mutually exclusve projects. If it chooses project A, Alied Biscuit Co. will have

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7. Unequal project fives Allied Biscuit Co, has to choose between two mutually exclusve projects. If it chooses project A, Alied Biscuit Co. will have the opportunity to make a similar investment in three vears. However, if it chooses project B, it will not have the opportunity to make a second investment, The following table Ilsts the cash flows for these projects. If the firm uses the replacement chain (common lfe) approach, what will be the difference between the net. present value (NPV) of project A and project B, assuming that boxh projects have a welighted average cost of capital of 12% ? 514,039 $19,439 $16,359 $12.959 $21,599 Allied Biscuit Co. is considering a three-year project that has a welghted average cost of capital of 10% and a NPV of $85,647. Alled Biscuit Co. can replicate this project indefinitely, What is the equlvalent annual annulty (EAA) for this project? $29,274 $30,996 $34,440 $41,328 $39,606

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