1. Sanderson Sand Co. is looking at 2 projects - Project N and Project O. The cashflows of the 2 projects are as follows: Project N Project Year 0 (3000) Year 0 (5000) Year 1 1,700 Year 1 3,200 Year 2 1,600 Year 2 1,800 Year 3 1,000 Year 3 900 Year 4 1,300 Year 4 700 Year 5 500 Year 6 400 The firm's cost of capital is 10%. Calculate the replacement-chain NPV for each project. Which project would be preferred under the replacement chain method? 2. Kermit Kite Co. has 2 projects under consideration - Project C and Project D with the following cashflows Project Project D Year o (800,000) Year o (360,000) Year 1 450,000 Year 1 200,000 Year 2 350,000 Year 2 265,000 Year 3 215,000 The firm's cost of capital is 12%. Calculate the EAA for each project. Which is the preferred project under EAA and why