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Extensive Enterprise Inc. has to choose between two mutually exclusive projects. If it chooses project A, Extensive Enterprise Inc. will have the opportunity to make

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Extensive Enterprise Inc. has to choose between two mutually exclusive projects. If it chooses project A, Extensive Enterprise 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 11%? Cash Flow Project A Year : Year 1: -$10,000 7,000 Project B Year O: Year 1: Year 2: Year 2: 15,000 Year 3: 14000 Year 3: -$45,000 10,000 17,000 16,000 15,000 14,000 13,000 Year 4: Year 5: Year 6: O $15,094 O $13,319 O $14,206 O $12,431 O $17,758

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