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Galaxy Corp. has to choose between two mutually exclusive projects. If it chooses project A, Galaxy Corp. will have the opportunity to make a similar
Galaxy Corp. has to choose between two mutually exclusive projects. If it chooses project A, Galaxy Corp. 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 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 14% ? $15,409$13,697$17,121$14,553$10,273 Galaxy Corp. is considering a five-year project that has a weighted average cost of capital of 12% and a NPV of $56,489. Galaxy Corp. can replicate this project indefinitely. What is the equivalent annual annuity (EAA) for this project? $18,022$15,671$13,320$18,805$17,238
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