Question: Consider the following mutually exclusive projects. Year Cash Flow REC Cash Flow XYZ 0 -1000 -1000 1 500 100 2 1400 300 3 - 400

Consider the following mutually exclusive projects.

Year Cash Flow REC Cash Flow XYZ
0 -1000 -1000
1 500 100
2 1400 300
3 - 400
4 - 600
5 - 350
6 - 125

Using the Replacement Chain method, which of the two mutually exclusive projects should be chosen? Why? SHOW YOUR WORK.

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