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Year Proj Y Proj Z 0 ($2,500,000) ($2,500,000) 1 2,100,000 950,000 2 875,000 863,000 3 675,000 4 900,250 Compare both projects using NPV if the

Year

Proj Y

Proj Z

0

($2,500,000)

($2,500,000)

1

2,100,000

950,000

2

875,000

863,000

3

675,000

4

900,250

  1. Compare both projects using NPV if the cost of capital is 10%.
  2. Compare each project using the IRR approach.
  3. Now compare both projects using the equivalent annual annuity (EAA) method.
  4. Compare each project using the replication approach.

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