Unequal project livesUnequal project lives

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 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 $13\%?$

Cash Flow

$$23,907$

$$14,127$

$$13,040$

$$15,214$

$$21,734$

Galaxy Corp. is considering a three$-$year project that has a weighted average cost of capital of $10\%$ and a NPV of $$85,647.$ Galaxy Corp. can replicate

this project indefinitely. What is the equivalent annual annuity $($EAA$)$ for this project?

$$34,440$

$$32,718$

$$43,050$

$$30,996$

$$29,274$

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 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 $13\%?$

Cash Flow

$$23,907$

$$14,127$

$$13,040$

$$15,214$

$$21,734$