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KOMH Blankets Inc. is considering two mutually ecclusive projects. Both projects require an initial aff investment of $ 8 9 , 0 0 0 and

KOMH Blankets Inc. is considering two mutually ecclusive projects. Both projects require an initial aff investment of $89,000 and are typical average-risk projects for the firm. Project A has an expected lif Years with after-tax cash inflows of $25,000 at the end of years 1 and 2 and $75,000 at the end of Yea Project B has an expected life of 9 years with after-tax cash inflows of $18,500 at the end of each of tI next 9 years. The firm's WACC is 13%.
If the projects cannot be repeated, which project should be selected if KOMH Blankets uses NPV as it criterion for project selection (A or B)?
Assume that the projects can be repeated and that there are no anticipated changes in the cash flow: Using the replacement chain analysis, what is the NPV of Project A Extended?
If the projects can be repeated, which project should be selected (A or B)?
Using the equivalent annual annuity (EAA) method, which project should you select (A or B)?
What is the EAA of the project selected?
Worth 25 points total.
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