Question: A firm is considering two mutually exclusive projects, as follows. Determine which project should be accepted if the discount rate is 15 percent. Use the

A firm is considering two mutually exclusive projects, as follows. Determine which project should be accepted if the discount rate is 15 percent. Use the chain replication approach. Assume both projects can bereplicated.

Project Initial CF After-tax CF1After-tax CF2 After-tax CFa -5,000 3,000 2,500 750 4,050 1,750 0 2 2,000

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