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Globo-Dharma Co. has to choose between two mutually exclusive projects. If it chooses project A, Globo-Dharma Co. will have the apportunity to make a similar
Globo-Dharma Co. has to choose between two mutually exclusive projects. If it chooses project A, Globo-Dharma Co. will have the apportunity 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 follawing table lists the cash flows for these projects. If the firm uses the replacernent 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 Q? $13,936$10,452$11,323$17,420$14,807 Globo-Dharma Co. is considering a four-year project that has a weighted average cast of capital of 11% and a NPV of $75,682. Glabo-Dharma Ca. can replicate this project indefinitely. What is the equivalent annual annuity (EAA) for this project? $26,833$20,735$28,053$21,955$24,394
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