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7. Unequal project lives Wizard Inc, has to choose between two mutually exclusive projects. If it chooses project A, Wizard Inc. will have the opportunity

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7. Unequal project lives Wizard Inc, has to choose between two mutually exclusive projects. If it chooses project A, Wizard Inc. 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 capital of 13 ss? $17,343$13,874$11,273$12,140$15,609 Wizard Inc. is considering a three-year project that has a weighted zverage cost of capital of 10% and a NPV of s45, 681 . Wirard inc. can fepilcate this project indefintely. What is the equivalent aninual annuty (EAA) for this project? 520,206 517,451 118r369 522,043 516,532

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