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Unequal project lives Newtown Corp. has to choose between two mutually exclusive projects. If it chooses project A , Newtown Corp. will have the opportunity
Unequal project lives
Newtown Corp. has to choose between two mutually exclusive projects. If it chooses project A Newtown Corp. will have the opportunity to make a similar investment in three years. However, if it chooses project 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
tableCash Flow,Project AProject BYear :$Year :$
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