$7.$ Unequal project lives

Widget Corp. has to choose between two mutually exclusive projects. If it chooses project A$,$ Widget 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 $10\%?$

Cash Flow

Project A Project B

Year $0$: $$$$17,500$ Year $0$: $$$$40,000$

Year $1$: $10,000$ Year $1$: $8,000$

Year $2$: $16,000$ Year $2$: $15,000$

Year $3$: $15,000$ Year $3$: $14,000$

Year $4$: $13,000$

Year $5$: $12,000$

Year $6$: $11,000$

A$.$ $$15,441$

B$.$ $$13,125$

C$.$ $$10,809$

D$.$ $$12,353$

E$.$ $$13,897$

Widget Corp. is considering a five$-$year project that has a weighted average cost of capital of $13\%$ and a NPV of $$30,450.$ Widget Corp. can replicate this project indefinitely. What is the equivalent annual annuity $($EAA$)$ for this project?

A$.$ $$9,523$

B$.$ $$10,388$

C$.$ $$8,657$

D$.$ $$8,224$

E$.$ $$9,956$