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7. Unequal project lives ABC Telecom has to choose between two mutually exclusive projects. If it chooses project A, ABC Telecom will have the opportunity
7. Unequal project lives ABC Telecom has to choose between two mutually exclusive projects. If it chooses project A, ABC Telecom will have the opportunity to make a similar investment in three years. However, if it chooses project B, it will not have the opportunity to make a second investment. The following table lists the cash flows for these projects. If the firm uses the replacement chain (common life) approach, what will be the difference between the net present value (NPV) of project A and project B, assuming that both projects have a weighted average cost of 12% ? $14,459$12,852$13,655$16,065$9,639 ABC Telecom is considering a four-year project that has a weighted average cost of capital 12% and a NPV of $29,567. ABC Telecom can this project indefinitely. What is the equivalent annual annuity (EAA) for this project? $11,194$9,734$11,681$10,707$8,274
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