Question: Below are the cash flows for two projects: Year 0, 1, 2, 3, 4 Proj Y ($2,500,000) | 2,100,000 | 875,000 | - | -

Below are the cash flows for two projects:

Year 0, 1, 2, 3, 4

Proj Y ($2,500,000) | 2,100,000 | 875,000 | - | - |

Proj Z ($2,500,000) | 950,000 | 863,000 | 675,000 | 900,250 |

How do you compare each project using the replication approach?

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