A) Using the replacement chain approach, which project would you chose to invest in?

B) Using the equivalent annual annuity approach, which project would you chose to invest in?

2. You are evaluating two mutually exclusive projects. The cash flows for each are: Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Project A ($50,000) $20,000 $35,000 $20,000 Project B ($75,000) $22,000 $25,000 $30,000 $25,000 $15,000 $10,000 Assume that, if needed, each project is repeatable with no change in cash flows. Your cost of capital is 13%