22. The Perth Pie Company is considering two mutually exclusive investments that would increase its capacity to make strawberry tarts. The firm uses a 12% cost of capital to evaluate potential investments. The two projects have the following costs and expected cash flow streams: Year Project A Project B 0 -$30,000 -$30,000 1 $10,500 $6,500 2 $10,500 $6,500 3 $10,500 $6,500 4 $10,500 $6,500 5 $6,500 6 $6,500 7 $6,500 8 $6,500 a. Using these data, calculate the net present value for Projects A and B. b. Create a replacement chain for Alternative A. Assume that the cost of replacing A will be $30,000 and that the replacement project will generate cash flows of $10,500 for years 5 through 8. Using these figures, recompute the net present value for Alternative A. c. Which of the two alternatives should be chosen, A or B? Why? d. Use the equivalent annual annuity method to solve this problem. How does. 22. The Perth Pie Company is considering two mutually exclusive investments that would increase its capacity to make strawberry tarts. The firm uses a 12% cost of capital to evaluate potential investments. The two projects have the following costs and expected cash flow streams: Year Project A Project B 0 -$30,000 -$30,000 1 $10,500 $6,500 2 $10,500 $6,500 3 $10,500 $6,500 4 $10,500 $6,500 5 $6,500 6 $6,500 7 $6,500 8 $6,500 a. Using these data, calculate the net present value for Projects A and B. b. Create a replacement chain for Alternative A. Assume that the cost of replacing A will be $30,000 and that the replacement project will generate cash flows of $10,500 for years 5 through 8. Using these figures, recompute the net present value for Alternative A. c. Which of the two alternatives should be chosen, A or B? Why? d. Use the equivalent annual annuity method to solve this problem. How does